WTI added 18.50 percent in April; Crude oil bulls could test $60.00 as it remains in bullish momentum!

West Texas Intermediate (WTI) is looking bullish at the moment as is trading above the psychological level of $50.00. It’s remarkable that for the last five weeks the US crude added more than $10.00 a barrel as it rose for a fifth consecutive week after rebounding from the $42.00 level.

WTI for April traded up +18.50 percent at $56.40 a barrel, after touching a 2015 peak at $57.40 following a -8.71 percent in March. In a monthly report, OPEC said demand for its oil this year would be 80,000 barrels per day higher than previously thought as lower prices curb supplies in the United States and other non-member countries.

Oil prices plunged in the six months from June 2014 to January 2015, pushing WTI down more than 65 percent to almost $40 a barrel. However, the oil market has gradually recovered the last couple of months (Feb +4.13 percent) as lower prices have discouraged production, especially in United States and Europe.

Technically, the medium term and long term trend remains a downtrend since the price still lies below the 200-period SMA, on both timeframes (daily and weekly charts). The break above the strong resistance level of $54.20 did not come as a surprise, following the powerful rally in the US crude after rebounding from the $42.00 region few weeks ago, which has seen it break through many significant resistance levels including $44.75, $47.00 and more recently the psychological level of $50.00.

The price is currently testing the 23.6% Fibonacci retracement level from the June 2014 high to March 2015 low. For now, I would expect the bulls to remain in control and to push the price further up and towards the psychological level of $60.00. Both oscillators support the notion since the MACD is rising in a bullish territory above its trigger line while the Relative Strength index is also rising above 50. The $60.00 level will be a crucial for the bulls as a break above there could suggest that we are in a more serious retracement, prompting a more aggressive move towards the $70.00 level, slightly above the 38.2% Fibonacci Retracement level.

Alternatively, if the bulls fail to break above the $60.00 level then I would expect the bears to drive the price back below the $54.20, plunging the price below the short-term ascending trend line and around the psychological level of $50.00.