Wednesday, December 19, 2012

WTI and Brent Crude Oil charts: an update

WTI Crude chart

The 6 months daily bar chart pattern of WTI Crude oil shows an expected break below a 'rising wedge' pattern, followed by a pullback above both 20 day and 50 day EMAs. Since oil's price is trading below its falling 200 day EMA in a bear market, such a pullback can be used as an opportunity to sell.

The initial pullback started with a volume spurt, but volumes trailed off as the pullback rally continued past the two EMAs. That is a sign of a rally losing momentum.

Daily technical indicators are beginning to turn bullish. MACD has crossed above its signal line, but both are still negative. RSI has moved above its 50% level. Slow stochastic has climbed up from its oversold zone to the 50% level. Without volume support, the rally is unlikely to sustain. 

On longer-term weekly chart (not shown), WTI Crude oil price is struggling to remain in a bull market as it closed below its 200 week EMA two weeks in a row.

Brent Crude chart

The following comments were made in the previous post analysing the 6 months daily bar chart pattern of Brent Crude oil: "All three EMAs have merged together. Usually a sharp price move follows, which is likely to be downwards."

The down move happened to be a break down from a bearish 'rising wedge' pattern. The subsequent pullback rally has been weak, and accompanied by a fall in volumes.

Daily technical indicators are bearish. MACD is touching its signal line in negative territory. RSI has moved up to its 50% level. Slow stochastic has emerged from its oversold zone. 

On longer-term weekly chart (not shown), Brent Crude oil price is trading below its 20 week and 50 week EMAs but well above its rising 200 week EMA. The long-term bull market is intact, despite being in a bear market in the short-term. 

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