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Tuesday, March 26, 2013

WTI and Brent Crude Oil charts: an update

WTI Crude chart

WTI Crude_Mar2613

The 6 months daily bar chart pattern of WTI Crude Oil seems to have shaken off the bears successfully by preventing the ‘death cross’ of the 50 day EMA below the 200 day EMA. Oil’s price is trading above all three EMAs, and is back in bull territory.

Daily technical indicators are turning bullish, which means a test of the recent top at 98 is a possibility. MACD is rising above its signal line, and about to enter positive territory. RSI has moved above its 50% level. Slow stochastic dropped from its overbought zone, but is rising again.

However, note that RSI and slow stochastic are showing negative divergences by failing to reach higher tops with oil’s price. Strong volumes on down days is another bearish sign. Signs of recovery in the US economy and fall in inventory at Oklahoma seem to have emboldened the bulls.

Brent Crude chart

Brent Crude_Mar2613

The 6 months daily bar chart pattern of Brent Crude Oil has been in a downtrend for the past 6 weeks, with not much sign of any recovery. The fall in oil’s price may be a reflection of the state of the UK economy, but is also partly due to improvement in production from North Sea.

Daily technical indicators are looking quite bearish. MACD is in oversold zone below its signal line, though its downward momentum has slowed. RSI is moving sideways below its 50% level, and has received good support from the edge of its oversold zone. Slow stochastic attempted to emerge from oversold territory, but failed.

Bears have been using every rise to sell. Bulls will require special effort to prevent a ‘death cross’ of the 50 day EMA below the 200 day EMA.

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