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Tuesday, May 26, 2015

WTI and Brent Crude Oil charts: an update

WTI Crude chart

WTI Crude_May2515

The daily bar chart pattern of WTI Crude has been consolidating sideways with a downward bias since touching a high of 62.50 on May 6 ‘15. It appears to be forming a ‘falling wedge’ pattern that has bullish implications.

Strong volumes on down days mean that bears are in no mood to give up without a fight. There is a possibility that the ‘falling wedge’ may turn out to be a ‘descending triangle’ – which is a bearish pattern. It may be prudent to wait for the pattern to play out over the next couple of weeks.

Daily technical indicators are giving mixed signals – which is often the case during periods of consolidation. MACD is moving sideways in positive zone, but is below its signal line. Note that the signal line has formed a bearish ‘rounding top’ pattern.

RSI bounced up from its 50% level, but is moving down. Slow stochastic has dropped below its 50% level, but moving up. Oil’s price is trading below its 200 day EMA in a bear market.

On longer term weekly chart (not shown), oil’s price has spent 6 weeks above its rising 20 week EMA, but is trading well below its falling 50 week and 200 week EMAs in a long-term bear market. Weekly technical indicators are looking bullish, but giving mixed signals. MACD is showing good upward momentum in negative zone. RSI has just managed to move above its 50% level. Slow stochastic is inside its overbought zone, but is falling.

Brent Crude chart

BrentCrude_May2515

The daily bar chart pattern of Brent Crude oil has been consolidating sideways within a ‘falling wedge’ pattern since touching a high of 69.50 on May 6 ‘15. The likely breakout from a ‘falling wedge’ is upwards.

Note that an upward breakout should be accompanied by a significant increase in volumes – otherwise the breakout may turn out to be a ‘false’ one. Strong volumes on down days show that bears remain active despite a strong rally from the Jan ‘15 low. Oil’s price may consolidate some more within the ‘wedge’.

Daily technical indicators are giving mixed signals – which sometimes happen during periods of consolidation. MACD is moving sideways in positive zone, but is below its signal line. Note that the signal line has formed a bearish ‘rounding top’ pattern.

RSI bounced up from its 50% level, but is moving down towards it. Slow stochastic has bounced up weakly from the edge of its oversold zone. Oil’s price is trading below its sliding 200 day EMA in a bear market.

On longer term weekly chart (not shown), oil’s price has spent 6 weeks above its rising 20 week EMA, but is trading well below its falling 50 week and 200 week EMAs in a long-term bear market. Weekly technical indicators are giving mixed signals. MACD is showing good upward momentum in negative zone. RSI has slipped below its 50% level. Slow stochastic has dropped down from its overbought zone.

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