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Tuesday, April 29, 2014

WTI and Brent Crude Oil charts: an update

WTI Crude chart

WTI Crude_Apr2814

The following comments were made in a previous update to the daily bar chart pattern of WTI Crude oil: “Though oil’s price is trading well above its three EMAs in a bull market, the hurdle at 105 needs to be crossed before bulls can regain full control.” 

Oil’s price failed to cross 105. Bears used the opportunity to press sales and push oil’s price below its 20 day and 50 day EMAs. However, the 200 day EMA is still rising and oil’s price is trading above it. Bulls may use the support of the long-term moving average to mount another rally.

Daily technical indicators are looking bearish. MACD is still positive, but is falling swiftly below its signal line. RSI has slipped below its 50% level. Slow stochastic is ready to enter its oversold zone.

Oil’s price may be forming a bearish ‘double top’ pattern – which will be confirmed technically only if it drops below its Mar ‘14 low of 97.50. If 97.50 gets breached, oil’s price can drop to 93.

On longer term weekly chart (not shown), oil’s price is trading above all three weekly EMAs in a long-term bull market.

Brent Crude chart

Brent Crude_Apr2814

In the previous update to the daily bar chart pattern of Brent Crude oil, the following remarks were made: “The rally may continue a bit longer. However, a failure to move above its Mar ‘14 top of 112 would mean a continuation of a bearish pattern of lower tops and lower bottoms that began in early Dec ‘13.”

The rally did continue a bit longer, but oil’s price failed to reach even the 111 level. A sharp fall on high volumes has taken oil’s price back into bear territory (below its three EMAs). The bearish pattern of lower tops and lower bottoms continues.

Daily technical indicators are turning bearish, which means the correction may not be over yet. MACD is about to drop from its overbought zone and cross below its rising signal line. RSI has just slipped below its 50% level. Slow stochastic has dropped from its overbought zone.

On longer term weekly chart (not shown), oil’s price has dropped below its 20 week and 50 week EMAs, but is trading above its 200 week EMA.

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