The daily bar chart pattern of WTI Crude oil dropped to a new low below 35 on Dec 14 '15, but formed a 'reversal day' pattern (lower low, higher close) and almost reached the 38 level the next day.
Despite good volume support, the 2 days recovery ended quickly. Oil's price failed to test resistance from the falling 20 day EMA, and drifted down below 36.
Daily technical indicators are moving sideways deep inside bearish zones. Bears are selling at every rise. They may continue to do so for some more time.
On longer term weekly chart (not shown), oil’s price continues to trade well below its three weekly EMAs in a long-term bear market. Weekly technical indicators are looking oversold, but showing positive divergences by not falling lower.
Brent Crude chart
The daily bar chart pattern of Brent Crude oil dropped to a 10 years low of 36 on Dec 21 '15. The fall during the past 2 months has been quite sharp. A technical bounce is a possibility.
Daily technical indicators are inside their oversold zones, which is also hinting at a technical bounce. Bulls need to be courageous and nimble-footed to try and eke out some gains.
The bottom seems to be falling out of the oil market. But it may not be a good idea to go short now.
On longer term weekly chart (not shown), oil’s price is trading well below its three weekly EMAs in a long-term bear market. Weekly technical indicators are inside their oversold zones.