Oil Bulls Had a Daily Close Above $21.50 per Barrel- Can It Reach $28?

Oil bulls had a daily close above the $21.50 per barrel. The price is moving higher with bullish interventions that may lead the price towards $28 in the coming trading session. Let's check the Oil Technical Analysis for more levels and insights.

May 05, 2020, | AtoZ Markets - WTI bullish momentum is very impressive above the $20. Moreover, oil managed to breach the $21.50 resistance with a daily close above it. After the recent market crash below the $0 level, such gain indicates that investors are keen to put their investment in oil with the hope that lockdowns and shutdowns will minimize soon. As a result, the demand for oil will increase in the coming days.

For the 24 hours to 23:00 GMT, Crude oil gained more than 16% against the US Dollar, following the voluntary production cuts by most of the giant oil producers and amid ease in coronavirus lockdowns in some countries. The United States and Italy were the major countries to minimize the lockdowns to revive the economy, which pushed equities and Crude oil up.

Oil Breached the $21.50 Resistance Level

After the recent collapse in the WTIUSD, investors are back to take part in their trading activity. As a result, the price bounced back from an all-time low recently.

oil bulls had a daily close

image: Oil 4-hour chart

According to the 4-hour chart, the price managed to stay above the $21.50 level and pointing for more highs. The MACD histogram is stable at the bullish zone, which is aiming for higher momentum. On the other hand, the strong bullish momentum in the intraday chart drove the price above the dynamic level of 20 EMA. As a result, the price may correct lower towards the $21.50 level again before moving further high.

As some correction is pending in the Oil price in the intraday chart, any bearish rejection from $21.50 would be another buying opportunity in the oil. Moreover, as long as the price is trading above the $18 level, the overall outlook is expected to remain bullish.

To Read More - Bank of China Asks CME to Probe Abnormal Fluctuations in Oil Prices

Crude Oil is Potential to Test the $28.00 Level

Oil has gained bullish momentum and bounced above the $10 recently. Moreover, as the price managed to breach the $21.50 level with a bullish daily close, it is likely to continue higher in the coming days.

image: Oil Daily Chart

According to the daily chart, the price is trading above the event level of $21.50. The dynamic level of 20 EMA also supported the break of the $21.50. Therefore, price is likely to reach the next resistance at $28 after showing some correction.

At this point, the price may face some bearish pressure due to the profit taking by buyers. Later on, the bullish price action may continue higher as long as the price is trading above the $21.50 level. On the other hand, a strong bearish daily close below the $21.50 may drag the price down towards $18 level.

To Conclude, WTI is very impressive above $21.50 on the intraday chart. At this point, the price may move lower with a corrective momentum before proceeding further highs. On the other hand, a daily close below the $21.50 level may force the price to test $18 level again. 

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