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Tuesday, January 28, 2014

WTI and Brent Crude Oil charts: an update

WTI Crude chart

WTI Crude_Jan2714

Two weeks back, the 6 months daily bar chart pattern of WTI Crude oil had broken down from a bearish ‘rising wedge’ pattern below all three daily EMAs, and seeking support from its longer-term 200 week EMA (not shown on chart).

Daily technical indicators were looking oversold, which led to the following comments: “Bulls may attempt another rally. Bears are likely to use it as a selling opportunity.” Bulls did attempt a rally – but resistance from the falling 200 day EMA proved too strong.

Daily technical indicators are turning bearish. MACD is above its signal line, but is turning down after failing to enter positive territory. RSI had a brief foray above its 50% level, but is ready to drop below it. Slow stochastic entered its overbought zone, but its upward momentum has stalled.

Bulls may seek solace from the higher volumes seen on up-days during the past two weeks. Bears will try to tighten their grip and push oil prices lower.

Brent Crude chart

Brent Crude_Jan2714

The 6 months daily bar chart pattern of Brent Crude oil briefly dropped below the 106 level, recovered quickly on good volume support but could not rise beyond its 20 day EMA.

Bears pressed sales and oil’s price has dropped below all three EMAs once again. Note that the 50 day EMA has crossed below the 200 day EMA – the ‘death cross’ that technically signals a bear market.

Daily technical indicators are looking bearish. MACD is about to cross below its signal line in negative territory. RSI failed to move above its 50% level, and has started falling. Slow stochastic is turning down after crossing its 50% level.

On longer-term weekly charts (not shown), WTI and Brent Crude oil are trading above their respective 200 week EMAs. That means the longer-term bull markets are still intact.

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