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Tuesday, September 23, 2014

WTI and Brent Crude Oil charts: sliding deeper into bear territory

WTI Crude chart

WTI Crude_Sep2214 

In a previous post on the 6 months daily bar chart pattern of WTI Crude oil, bears were expected to maintain their control, but the zone between 90-92 was expected to provide some support.

All three EMAs are falling, and oil’s price is trading below them in a bear market. Note that a couple of attempts at rallies touched lower tops of 96 and 95, but oil’s price received good support from the 90-92 zone. Will the support hold?

All three technical indicators are in bearish zones, but are showing positive divergences by forming bullish patterns of higher tops and higher bottoms during the past 4 weeks, while oil’s price has been trading in a bearish pattern of lower tops and lower bottoms.

Another attempt at a rally is possible from the current level, but downward momentum appears to be building up again. That means a likely breach of the 90 level should follow shortly.

On longer term weekly chart (not shown), oil’s price has closed below its 200 week EMA for three straight weeks. Weekly technical indicators are looking oversold. The 20 week EMA has crossed below the 50 week EMA, and is falling rapidly towards the 200 week EMA. A fall below 90 can push oil’s price down to 85.

Brent Crude chart

BrentCrude_Sep2214

The 6 months daily bar chart pattern of Brent Crude oil continues to slide deeper into bear territory, with the falling 20 day EMA thwarting all attempts at rallies by bulls. Excess supply in the market, following restarting of production at Libya’s largest oil field after a rebel rocket attack, added to the woes of bulls.

All three technical indicators are in bearish zones and looking a bit oversold, and also showing positive divergences by touching higher bottoms while oil’s price touched a lower bottom. Some sideways consolidation or a weak attempt at a rally will probably face more selling from bears.

On longer term weekly chart (not shown), oil’s price has closed below its 200 week EMA for six weeks in a row. The 20 week EMA is about to cross below the 200 week EMA. Weekly technical indicators are looking bearish, and oversold. The long-term bull market is under serious threat. A test of the Jun ‘12 low of 88 is a possibility.

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