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Tuesday, November 25, 2014

WTI and Brent Crude Oil charts: an update

WTI Crude chart

WTI Crude_Nov2414

Not much has changed in the technical set-up since the previous post on the daily bar chart pattern of WTI Crude oil. Oil’s price slipped down to touch a new intra-day low of 73 on Nov 14 – but formed a ‘reversal day’ pattern (lower low, higher close).

Daily technical indicators showed positive divergences by not touching new lows with oil’s price. A brief rally ensued, but the falling 20 day EMA provided strong resistance.

Oversold conditions have been corrected, but all three indicators are still in bearish zones, and their upward momentum is slowing down. Oil’s price continues to trade below all three falling EMAs in a long-term bear market.

On longer term weekly chart (not shown), oil’s price has closed below its 200 week EMA for 12 straight weeks. Weekly technical indicators are deep inside their respective oversold zones. The 50 week EMA is poised to cross below the 200 week EMA and technically confirm a long-term bear market. The next lower target is 70.

Brent Crude chart

BrentCrude_Nov2414

The daily bar chart pattern of Brent Crude oil dropped to a new intra-day low of 76.50 on Nov 14 – but formed a ‘reversal day’ pattern (lower low, higher close). All three daily indicators dropped inside their respective oversold zones, but two of them – MACD, RSI – showed positive divergences by touching higher bottoms.

Note that RSI and Slow stochastic formed bullish ‘inverse head and shoulders’ patterns. But bears are so dominant that the subsequent rally lasted all of 5 trading sessions, and could not overcome resistance from the falling 20 day EMA.

Though oversold conditions have been corrected, all three indicators are still in bearish zones, and their upward momentum is already slowing down. All three EMAs are falling, and oil’s price is trading below them in a long-term bear market.

On longer term weekly chart (not shown), oil’s price has closed below its 200 week EMA for 15 weeks in a row. Weekly technical indicators are deep inside their respective oversold zones. The ‘death cross’ of the 50 week EMA below the 200 week EMA has technically confirmed a long-term bear market. The next lower target is 75.

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