WTI Crude chart
In a previous post on the 6 months daily bar chart pattern of WTI Crude oil, technical indicators had turned bullish, suggesting a possible upward breach of the 105 level. It was also mentioned that 105-108 was a resistance zone.
Note that oil’s price convincingly breached the 105 level with a sharp increase in volumes on Jun 12 ‘14. After moving up to test the 108 level the next day, oil’s price has been consolidating within the resistance zone between 105-108.
Failure to breach the 108 level may enthuse bears to become active. Technical indicators are in bullish zones after correcting overbought conditions. The consolidation may continue a bit longer.
Why did oil’s price fail to move above the 108 level? Fundamentalists(!) may argue that Iraq’s oil production has not been affected yet due to the sectarian conflict. So, there was no impetus for bulls to hold on to their long positions. Chartists(?) will say that resistance zones have a tendency to stall bull rallies.
On longer term chart (not shown), all three weekly EMAs are rising and weekly technical indicators are in bullish zones. Oil’s price is trading in a long term bull market.
Brent Crude chart
In the previous post on the 6 months daily bar chart pattern of Brent Crude oil, technical indicators were beginning to turn bullish after a correction, and on long-term weekly chart oil’s price was trading in a bull market.
That can hardly explain the sharp price spike on huge volumes that occurred on Jun 12 ‘14. Obviously, bull speculators had a field day using the turmoil in Iraq as an excuse. Oil’s price continued to surge past previous resistance levels of 113 and 115 before halting just short of 116.
All three technical indicators – MACD, RSI, Slow stochastic – had become overbought, and have started correcting. Oil’s price may drop down to 112.
On longer term chart (not shown), oil’s price is trading above its three weekly EMAs, and weekly technical indicators are in bullish zones. The long-term bull market is alive and kicking.