Middle-east tensions spooked the crude oil prices. Brent crude oil breached $70.00 level to post its biggest one-day rise since September 2019. In fact, in the last year there have been five such sessions in which the price closed with more than 3.00% gains whereas there have been 14 sessions in which the price suffered a loss of 3.00% or more.

Let’s look at the year-end tally; the Brent crude surged $13 or 23% to closed at $67.45 levels.

So what should investors do? Historically, spike on account of external factors such as geopolitical concerns is usually regarded as the best time to take profit (remember September 2019 big up).

Now the daily chart suggests that the price could face stiff resistance at the 78.6% fib level $70.50 ahead of $71.50 and $73.00 its 200MA (Monthly).

The daily RSI lacks momentum, and the oscillator has been bearish. Hence the price should cap soon. However, if the price breaks above $70.50 level, it would witness some pushup, which would take the price to key resistance levels towards $71.50 and $73.00.

The price is trading above 200MAs (Weekly), which is an important medium-term moving average, indicating a limited downfall; however, if the price breaks below $64.90 levels, it would face selling pressure which would drag further towards $63.50-$63.00 levels.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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