(Bloomberg) -- Crude oil, up 36 percent this year, may extend its rally should prices cross their 200-day moving average, technical analysis from Petromatrix GmbH suggests.Oil for July delivery rose to $60.67 today on the New York Mercantile Exchange, the highest for the front-month contract since Nov. 28. The 200-day moving average of closing prices is at $63.29 a barrel, down from a peak of $112.48 on Oct. 3.“The 200-day moving average is a key level for many momentum models and a break of it would provide further support,” Petromatrix Managing Director Olivier Jakob said in a report yesterday.
Traders use moving averages to signal trends and indicate levels of support and resistance for prices. The rising 50-day moving average, currently at $52, will support prices, Jakob said. In addition, the 100-day mean reached a low of $44.13 on April 24 and started to rise, a bullish signal.Front-month oil traded above $60 for a second day. A sustained move above $60 will make that price a support and reinforce the level below at $55, Jakob said. Traders betting on oil falling back to $50 will “quickly move into the stress-test category,” he said.
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