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Tuesday, May 13, 2014

WTI and Brent Crude Oil charts: struggling to keep the bears away

WTI Crude chart

WTI Crude_May1214

The previous update to the daily bar chart pattern of WTI Crude oil contained the following remarks: “… 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.”

Note that oil’s price briefly dropped below its 200 day EMA, but recovered quickly to move back into bull territory. However, the combined resistance from its 20 day and 50 day EMAs has stalled the up move.

Daily technical indicators are looking a bit bearish. MACD is moving sideways below its falling signal line in negative territory. RSI is facing resistance from its 50% level. Slow stochastic has risen from its oversold zone, but remains below its 50% level.

Oil’s price may test and breach its 200 day EMA again. A drop below 97.50 will open up the possibility of a bearish ‘double top’ reversal pattern.

On longer term weekly chart (not shown), oil’s price bounced up after receiving good support from its 50 week EMA and is trading above all three EMAs in a bull market.

Brent Crude chart

BrentCrude_May1214

The 6 months daily bar chart pattern of Brent Crude oil spent a few days in bear territory, receiving good support from the 107 level. It has rallied back into bull territory, but without adequate volume support oil’s price may start to drift down once again.

Daily technical indicators are looking neutral to bearish. MACD is below its signal line and trying not to drop inside negative territory. RSI is straddling its 50% level. Slow stochastic has bounced up weakly from the edge of its oversold zone, and remains well below its 50% level.

Oil’s price is likely to continue its oscillation about its long-term moving average a while longer.

On longer term weekly chart (not shown), oil’s price is trading above its 200 week EMA in a bull market, but facing resistance from its entangled 20 week and 50 week EMAs.

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