USOIL: Rising for 4th Day

USOIL, H4

On Friday, Baker-Hughes released its weekly oil rig count report, revealing a 7-rig increase, to 798, and up 201 from a year ago. This marks the 4th consecutive week of increases, and indicates further gains in U.S. production, which last week topped at a record 10.25 mln bpd. USOIL fell to $61.20 from near $61.86 after the report.

The USoil is outperforming since then, and manage to climbed up to $62.00 area. It is currently consolidating between $62.00 – 62.30 area, with a slight weakness notices on London open. This area, coincides with the 50% Fibonacci retracement level set since the drop noticed from February 2.

In short-term, the market, however, indicates positive sentiment as technical indicators suggest that a move to the upside is quite possible within the day. The RSI and MACD fluctuate above neutral , presenting that positive momentum still holds, while Stochastic remain in the overbought territory.  Moreover, the price action signals a bullish intra-day picture, as it remains on the upper Bollinger Bands pattern, above the 20 and 50-period SMA, while the 20-period MA has confirmed a crossing above the 50-period MA. The latter strengthens the short-term Bullish view.

In the bigger picture, the USOil gives a mixed sign, with the price moving above the Pivot Point level and  50-Day SMA, but still in the Lower Daily Bollinger Bands pattern. The momentum indicators are mixed as well, and closer to a negative momentum, with RSI and Stochastic at neutral, while MACD remains negative since Ferbuary 9.

Therefore, as Fibonacci levels behave aslso as retracement levels, and with Oil finding resistance at the 50% Fibonacci, a break today above this area, would probably triggers a spike higher to the 20-DAY SMA and the 61.8% Fibonacci of $63.13. Otherwise if bearish move dominates, the area between Daily PP level found from Pivot Point analysis and the 38.2% Fibonacci level, at  61.00 – 61.37, could provide immediate support  for the future.