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Friday, February 28, 2014

WTI and Brent Crude Oil charts: an update

WTI Crude chart

WTI Crude_Feb2714

The 3 years weekly bar chart of WTI Crude oil has been in a bull market, which is technically indicated by a rising 200 week EMA and the 50 week EMA staying above the 200 week EMA throughout. The 20 week EMA has criss-crossed the 50 week EMA, which is an indication of shorter-term fluctuations.

Note that oil’s price dropped below its 200 week EMA into bear territory several times. But the long-term bull market remained intact because the 50 week EMA never dropped below the 200 week EMA (‘death cross’).

The strategy to follow in a long-term bull market is to buy the dips. Quite a few buying opportunities were provided when oil’s price dropped below its 50 week EMA.

Weekly technical indicators are looking bullish. MACD has just entered positive territory above its signal line. RSI has moved above its 50% level, but its upward momentum is receding. Slow stochastic is inside its overbought zone, but turning down. There may be some correction or consolidation in the near term.

Brent Crude chart

BrentCrude_Feb2714

The 3 years bar chart pattern of Brent Crude oil has been in a long-term bull market, as it is trading above its rising 200 week EMA. The 50 week EMA has remained above the 200 week EMA throughout.

Note that for the past 2 years, oil’s price has been consolidating sideways within a large symmetrical triangle – forming higher bottoms and lower tops. The way to make money in such a situation is to do shorter-term trading (in the range between 104 and 112).

Weekly technical indicators are mildly bearish. MACD and its signal line are entangled together and moving sideways just below the ‘0’ line. RSI and Slow stochastic have slipped below their respective 50% levels. The consolidation is likely to continue some more.

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