WTI Crude chart
The downward ‘gap’ that formed on the daily bar chart pattern of WTI Crude oil on Jul 6 was a strong signal for bulls to turn tail. The few that decided to stay back managed to fight for 7 days but got badly mauled.
Oil’s price has dropped to test its Apr 1 low of 47 but there is no sign of a bottom formation as yet. The Mar 17 low of 42 may get tested.
Daily technical indicators are inside their respective oversold zones. Oil’s price is trading well below its three falling EMAs in a bear market. There is a possibility of an upward bounce – which bears are likely to use to sell again.
On longer term weekly chart (not shown), oil’s price has been falling like a stone after forming a rare weekly downward ‘gap’, and is trading well below its three weekly EMAs in a long-term bear market. Weekly technical indicators are bearish and looking a little oversold.
Brent Crude chart
The bottom seems to have fallen out of oil’s price after a downward ‘gap’ was formed on Jul 6 ‘15. The following comment appeared in the previous post on the daily bar chart pattern of Brent Crude oil: “Such ‘gap’s tend to act as resistance zones to future up moves.”
Note that oil’s price rose to test resistance from the ‘gap’ on Jul 10, but dropped off like a waterfall and breached the Apr ‘15 low of 54. A drop below 50 can’t be ruled out.
Daily technical indicators are bearish and oversold. Oil’s price is trading well below its three EMAs in a bear market. An upward bounce is a possibility, but it won’t be a buying opportunity.
On longer term weekly chart (not shown), oil’s price has been rapidly falling after forming a rare weekly downward ‘gap’ and is trading well below its three weekly EMAs in a long-term bear market. Weekly technical indicators are in bearish zones and looking a bit oversold.