Crude oil rallied to $81.59, breaking a downtrend line and a key resistance level. Technical analyst Bruce sees next target at the 50-day moving average near $86.70.
Alpha Score of 68 reflects moderate overall profile with strong momentum, strong value, weak quality, moderate sentiment.
Crude oil rallied to $81.59 on Tuesday before pulling back, breaking a downtrend line and a prior lower swing high at $79.23. The move marks a bullish reversal, according to technical analyst Bruce, a CMT charter holder.
The breakout above $79.23 was the first break above a lower swing high since the $67.73 low. Combined with the trendline recovery, the bullish implications are stronger, Bruce said. The session high reached the April swing low near $81.94, where intraday resistance emerged. The new signals suggest improving momentum that should push through that zone, he added.
Initial upside targets are the 50-day moving average near $86.70 and the $88.90 area, the trigger for a symmetrical triangle breakdown. A sustained move above the 50-day MA would open the path to higher prices, Bruce said. The 200-day MA at $75.11 has been reclaimed and now serves as key support. The 20-day MA at $72.94 was confirmed as support with Monday's low.
The current advance is the second leg up following a multi-year bullish falling wedge breakout in March. That first leg saw a 69% surge from $70.49 to $119.54. While the second leg may not match that volatility, it could still see strong buying interest, Bruce noted.
The focus now shifts to whether the recovery can extend beyond initial resistance levels and confirm a broader continuation of the bullish trend. The next major test is the 50-day MA at $86.70.
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