US oil is maintaining strong bullish tone on Monday and holds above $51.00 handle, following strong rally on Friday when oil price was up 3.1% and broke above psychological $50.00 level, hitting one-month highs.
Monday’s action is so far holding in a tight range, consolidating strong rally on Friday and cracked barrier at $51.13 (100SMA).
Daily studies are turning into full bullish setup and favor further upside. Strong bullish sentiment on increased expectations for extension of production cut on OPEC meeting on 25 May is underpinning the action.
The price may extend towards $53.74 (12 Apr high) to fully retrace $53.74/$43.74 downleg.
Slow Stochastic is strongly overbought on daily chart but continues to move north, delaying to generate bearish signal. However, corrective action should be anticipated in the near-term, with broken $50.00 level now acting as strong support, together with broken 200SMA ($49.53) expected to contain dips.
Res: 51.22, 51.38, 52.00, 52.62
Sup: 50.90, 50.00, 49.53, 49.29
