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Tuesday, August 22, 2017

WTI and Brent Crude Oil charts: bears have the upper hand as bulls fail to extend pullback rallies

WTI Crude Oil chart


The daily bar chart pattern of WTI Crude Oil attempted a breakout above a sideways consolidation zone between the 200 day EMA and the 50 level, and touched a lower top of 50.22 on Thu. Aug 10.

Formation of a 'reversal day' bar (higher high, lower close) accompanied by a volume surge put paid to bullish hopes of extending the pullback rally any further.

Oil's price corrected below its three EMAs into bear territory and touched a low of 46.46 on Thu. Aug 17. Formation of another 'reversal day' bar (lower low, higher close) led to a technical bounce above the three EMAs on Fri. Aug 18.

Bear selling on Mon. Aug 21 has dropped oil's price below its three EMAs into bear territory once again. The bearish pattern of 'lower tops, lower bottoms' - which has dominated the chart for the past 6 months - continues.

Daily technical indicators are looking bearish. MACD is falling below its signal line in bullish zone. RSI has slipped below its 50% level. Slow stochastic has emerged from its oversold zone, and can trigger a technical bounce. Bears may use such a bounce to sell again.

On longer term weekly chart (not shown), oil's price closed below its 20 week and 50 week EMAs and well below its falling 200 week EMA in a long-term bear market. Weekly MACD and RSI are in neutral zones. Slow stochastic is showing downward momentum in bullish zone.

Brent Crude Oil chart


The following comments appeared in the previous post on the daily bar chart pattern of Brent Crude Oil: "Bulls may make an attempt to push oil's price above the May 25 top of 54.67 to breakout of the bearish pattern of 'lower tops, lower bottoms'. Strong volumes on recent down days mean bears will resist any such attempt." 

Oil's price touched an intra-day high of 53.64 on Thu. Aug 10, but formed a 'reversal day' bar (higher high, lower close) and corrected below its three EMAs into bear territory.

Good support from the 50 level triggered a technical bounce back into bull territory. Resistance from the 53 level prevented the rally from extending any further.

Daily MACD and RSI are in bullish zones but showing slight downward momentum. Slow stochastic has risen from its oversold zone but is facing resistance from its 50% level.

The bearish pattern of 'lower tops, lower bottoms' is now 6 months old. The 'golden cross' of the 50 day EMA above the 200 day EMA, which will technically confirm a return to a bull market, is still awaited. 

On longer term weekly chart (not shown), oil's price closed above its 20 week and 50 week EMAs but well below its falling 200 week EMA in a long-term bear market. Weekly MACD and RSI are in neutral zones. Slow stochastic is facing resistance from its overbought zone.

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