While other oil stocks are mixed, BP  (BP) - Get Report bulls are riding momentum. The shares gapped higher on the day and are up about 2% as oil prices rose amid escalating tension between the U.S. and Iran.

Can the gains continue?

If the Middle East is the only catalyst, then the bulls may run out of steam. The broader markets have shaken off a chunk of Friday’s declines, while oil and many energy stocks are off their highs.

However, should oil prices continue higher, then perhaps BP stock does have upside left in the tank. Let’s look at the charts to get a better idea of what’s going on.

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Trading BP Stock

The daily chart of BP.

The daily chart of BP.

U.S. stocks have enjoyed a year of gains, but generally speaking, energy stocks cannot say the same. It’s been a tough year for them and BP is no exception. That said, it is improving.

In October, BP finally broke out over downtrend resistance (purple line). Later, when it pulled back, this mark held as support, solidifying that the bulls were in control. Or at least more in control than the bears.

That test came in early December, but it’s also where BP stock ran into up-trend support (blue line). This double whammy technical catalyst was enough to jump-start the stock, enabling BP to reclaim all its major moving averages over the next few weeks.

With BP shares gapping up now, bulls have to be careful of a looming resistance mark: $39.50.

This area was support from February until July when it gave way and led to a notable breakdown in the share price. 

Subsequent rallies up to this figure have been met as resistance. Not helping is that the 50% retracement for the one-year range sits at $39.24.

Bears will try to defend this level and send BP stock back down toward the pre-gap level near $38 and the 50-day moving average. 

But if the bulls can push BP above this mark, it could trigger a move up over $40. That puts the 38.2% and 23.6% retracements in play, at $40.21 and $41.40, respectively.