The daily bar chart pattern of WTI Crude oil tried to defy gravity and made a surge towards its 200 day EMA. Low volumes during the last leg of the rally dashed bullish hopes of a sojourn into bull territory.
Oil's price faced strong resistance from its long-term moving average on Mar 18, formed a 'reversal day' bar (higher high, lower close) and corrected down to its rising 20 day EMA.
Daily technical indicators have corrected overbought conditions but remain in bullish zones. Oil's price can correct some more. Bulls may use the dip to mount another attempt at crossing the 200 day EMA.
On longer term weekly chart (not shown), oil’s price closed above its 20 week EMA for three straight weeks, but is trading below its falling 50 week and 200 week EMAs in a long-term bear market. Weekly MACD is in bearish zone. RSI is neutral. Slow stochastic looks ready to drop from its overbought zone. Despite the sharp rally, bears remain on top.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude oil made a feeble effort to cross above 42 on Mar 18, but formed a small 'reversal day' bar and corrected down to its rising 20 day EMA.
All three daily technical indicators showed negative divergences by failing to touch new highs with oil's price and triggered the correction.
Bulls can buy the dip to keep the rally alive. Falling volumes indicate that their enthusiasm may be waning.
On longer term weekly chart (not shown), oil's price closed above its 20 week EMA for the third week in a row, but is trading below its falling 50 week and 200 week EMAs. Weekly MACD and RSI are in bearish zones, but Slow stochastic has entered its overbought zone. The long-term bear market remains in force. Expect bears to pounce at any time.