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Tuesday, June 11, 2013

WTI and Brent Crude Oil charts: consolidating sideways

WTI Crude chart

WTI Crude_Jun1013

The following concluding comments were made two weeks ago about the daily bar chart pattern of WTI Crude oil: “The negative divergences could lead to a drop below the 200 day EMA. For the past 6 months, oil’s price has been consolidating in a broad range between 86 and 98. Since the 200 day EMA is rising, the scales are slightly tilted towards the bulls for now.”

Note that oil’s price did drop below its 200 day EMA, only to bounce up above all three EMAs and back into bull territory. The sideways consolidation within 86 and 98 continues. The 200 day EMA is rising gently. For a change, up-day volumes have been stronger than down-day volumes during the past two weeks – which is a bullish sign.

Daily technical indicators are looking bullish. MACD has crossed above its signal line in positive zone. Both RSI and Slow stochastic have risen above their respective 50% levels. However, oil’s price is nearing the 98 level, where bears have resorted to selling. Disappointing economic data from China may also put a lid on the upward movement of oil’s price.

Brent Crude chart


The 1 year daily bar chart pattern of Brent Crude oil continues its sideways consolidation in a bear market. The 200 day EMA is steadily sliding downwards, and attempts at up moves are being thwarted by the 50 day EMA.

Good news for the bulls is that volumes have been higher on up-days of late, and oil’s price managed to close above its 50 day EMA for the first time since Feb ‘13 – even if only for a day.

Daily technical indicators are looking slightly bullish. MACD has crossed above its signal line, and looks ready to enter positive territory. RSI has just above its 50% level. Slow stochastic is about to enter its overbought zone.

Remember that oil’s price is in a bear market, so any further up move is likely to attract selling pressure. The zone between 106 and 108 is going to provide strong resistance.

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