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Tuesday, November 6, 2012

WTI and Brent Crude Oil charts: bears on top

WTI Crude chart

WTI Crude_Nov0512

In the previous post on Oct 23 ‘12, it was mentioned that the 88 level on the daily bar chart pattern of WTI Crude oil may get breached. Note that the breach occurred the same day, accompanied by strong volumes. That is usually an indication that the support would turn into a strong resistance for future up moves.

The other point to note is that down-day volumes (in red) continue to be higher than volumes on up-days (in green). That is a sign of distribution. All three EMAs are falling and oil’s price is falling deeper into a bear market.

Technical indicators are bearish, but there are positive divergences visible. MACD is negative and below its signal line. But it is moving sideways. RSI is below its 50% level, but touched a slightly higher bottom while oil price dropped lower. Slow stochastic is inside its oversold zone, but also touched a slightly higher bottom.

WTI Crude price may attempt to move up, but is unlikely to cross the hurdle at 88. 

Brent Crude chart

BrentCrude_Nov0512_weekly 

The 2 years weekly closing chart pattern of Brent Crude oil is in an intermediate down trend. The 20 week EMA is on the verge of crossing below the 50 week EMA, which is bearish in the medium term.

Oil’s price dropped below the two EMAs and the support level of 110 on a volume surge. Any upward bounce is likely to face strong resistance from the two EMAs and the 110 level. However, the 200 week EMA is still rising and oil’s price is trading well above it. The long-term bull market is intact.

Weekly technical indicators are bearish. MACD has crossed below its signal line and entered negative territory. RSI has dropped below its 50% level. Slow stochastic has fallen sharply below its 50% level and getting ready to enter its oversold zone.

Any up move towards the 110 level can be used to book profits.

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