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Tuesday, March 25, 2014

WTI and Brent Crude Oil charts: an update

WTI Crude chart

WTI Crude_Mar2414

In the previous post, the daily bar chart pattern of WTI Crude oil was expected to correct due to negative divergences visible on the technical indicators. Oil’s price dropped and closed below its 200 day EMA accompanied by a volume spurt on Mar 12 ‘14.

After spending a couple of days in bear territory, oil’s price gradually moved up above its 200 day EMA. But the rally has been far from convincing because volumes have been sliding with stronger volumes on down days. Oil’s price is in the process of forming a bearish ‘rising wedge’ pattern from which the likely break out is downwards.

Technical indicators are looking bearish. MACD has dropped into negative territory below its falling signal line, but trying to turn around. RSI is just below its 50% level. Slow stochastic has emerged from its oversold zone.

On longer-term weekly chart (not shown), oil is trading above all three weekly EMAs but technical indicators are turning bearish. A drop below its recent low of 97.50 can take oil’s price down to 93.

Brent Crude chart

BrentCrude_Mar2414

The following comments in the previous post on the 6 months daily bar chart pattern of Brent Crude oil are repeated here: “All three EMAs have converged together and oil’s price is trading below them. There could be a quick drop towards 104.”

Oil’s price dropped down to 105.50 before recovering a little. Since touching a high of 112 at the beginning of the month, a bearish pattern of lower tops and lower bottoms has formed. All three EMAs are falling and oil’s price is trading below them in a bear market.

Daily technical indicators are in bearish zones. MACD has stopped falling, but remains below its falling signal line in negative territory. RSI is below its 50% level. Slow stochastic has emerged from its oversold zone.

On longer-term weekly chart (not shown), oil is trading above its 200 week EMA but technical indicators have turned bearish. A drop below its recent low of 105.50 can take oil’s price down to 103.

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