Tuesday, September 19, 2017

WTI and Brent Crude Oil charts: bulls finally breaking bear strangleholds

WTI Crude Oil chart


Bulls are on the verge of breaking the stranglehold of bears on the daily bar chart pattern of WTI Crude Oil

By moving above the Aug 1 top of 50.43 and touching an intra-day high of 50.85 on Sep 18, the bearish pattern of 'lower tops, lower bottoms' that dominated the chart for more than 6 months has been negated.

Bulls still have some work left before they can send bears packing. Oil's price failed to close above the Aug 1 top, and formed a 'long-legged doji' candlestick pattern - leaving the door open for another bear attack.

Sliding volumes during the month raises concerns that the rally may not sustain. The 'golden cross' of the 50 day EMA above the 200 day EMA, which will technically confirm a return to a bull market, is awaited.

Daily technical indicators are in bullish zones, but showing negative divergences by failing to touch new highs with oil's price. Slow stochastic appears to be forming a 'double top' reversal pattern inside its overbought zone, which can trigger a correction.

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 looking bullish. Slow stochastic is looking overbought.

Brent Crude Oil chart


The following comments were made in the previous post on the daily bar chart pattern of Brent Crude Oil: "A 'rectangle' is usually a continuation pattern. Since oil's price entered the pattern from below during a rally, the logical breakout should be upwards (i.e. above 53)."

Oil's price broke out above the 'rectangle' on Sep 5, but the breakout wasn't accompanied by a volume surge that would have technically validated the breakout. 

It was no surprise that oil's price formed a 'reversal day' bar (higher high, lower close) on Sep 8 and pulled back to the top of the 'rectangle' on Sep 11. Those who missed buying on the breakout, got an opportunity to do so on the pullback.

Oil's price rose above 55.50, but formed another 'reversal day' bar on Sep 18, which may lead to some correction or consolidation. The 'golden cross' of the 50 day EMA above the 200 day EMA has technically confirmed a return to a bull market.

Daily technical indicators are looking bullish. Slow stochastic may be forming a 'double top' reversal pattern inside its overbought zone. That may trigger some correction or consolidation. 

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 looking bullish. Slow stochastic is looking quite overbought and can limit further upside.

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