Oil Prices Record Biggest Two-Day Gain in Four Months Amid US-Iran Tensions

Oil prices have surged sharply amid US-Iran tensions, but the RSI has entered overbought territory at 78.7. Such levels typically lead to short-term corrections or profit-taking. Although the MACD remains positive, the price trading well above both the SMA20 and SMA50 indicates an overextended move. Following an 11.5% increase in the last 24 hours, the overbought technical indicators increase the likelihood of a short-term pullback. However, as geopolitical risks have not fully dissipated, any decline is expected to be limited.

The sharp rise in oil prices over the past two days has pushed the RSI to 73.9, indicating overbought conditions. This increases the likelihood of a short-term correction or profit-taking. Although geopolitical tensions in the news headlines have driven prices higher, technical indicators raise doubts about the sustainability of the rally. While the MACD line remains above the signal line, overbought conditions and a 10% increase in the last 24 hours bring the risk of a short-term pullback. Therefore, a slight decline in prices can be expected over the next 1-3 days.

The news headline points to a sharp rise in oil prices as geopolitical risks increase. This could serve as a positive catalyst for energy companies such as Exxon Mobil. Technical indicators also support this view; although the RSI is approaching overbought territory at 72, the MACD line remaining above the signal line and the price trading above the 20- and 50-day moving averages suggest the uptrend continues. The upward trend is expected to persist in the short term, but caution is warranted due to the overbought zone and potential profit-taking.

CVX shares have risen 3.5% in the last 24 hours, with the RSI entering overbought territory at 76.9. While the geopolitical-driven rise in oil prices provides short-term support, technical indicators point to overheating. Although the MACD remains positive, the RSI above 70 increases the risk of a short-term correction. Therefore, while the upward momentum is expected to continue, caution is warranted due to overbought conditions.