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Tuesday, December 4, 2012

WTI and Brent Crude Oil charts: consolidating within ‘rising wedge’ patterns

WTI Crude chart

WTI Crude_Dec0312

The 6 months daily bar chart pattern of WTI Crude oil hasn’t made much progress – closing almost at the same level it did two weeks back. However, the pattern it has formed during Nov ‘12 is a bearish ‘rising wedge’.

Note that on Nov 28 ‘12, oil’s price broke down below the ‘rising wedge’ on intra-day basis, but recovered to close within the wedge. Was it an advance warning of an eventual downward break out? Yesterday’s price bar, with an open and close near the day’s low seems to indicate that the rally may be running out of steam.

Daily technical indicators are looking bullish. MACD is rising above its signal line, and about to enter positive territory. RSI is above its 50% level. Slow stochastic is moving up towards its overbought zone. Oil’s price may consolidate a bit longer, but should eventually break down from the wedge.

Brent Crude chart

Brent Crude_Dec0312

The 6 months daily bar chart pattern of Brent Crude oil has managed to move up above all three EMAs. Unfortunately, that isn’t a bullish sign because of the formation of a bearish ‘rising wedge’ pattern during Nov ‘12.

All three EMAs have merged together. Usually a sharp price move follows, which is likely to be downwards.

Daily technical indicators are bullish but showing signs of weakness. MACD is above its signal line, but barely positive and moving sideways. RSI is above its 50% level but sliding down. Slow stochastic is about to re-enter its overbought zone, but showing negative divergence by touching a lower top.

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