Tuesday, June 10, 2014

WTI and Brent Crude Oil charts: undergo bull market corrections

WTI Crude chart

WTI Crude_Jun0914

The following comments were made in a technical update to the 6 months daily bar chart pattern of WTI Crude oil: “… volumes have dropped as oil’s price approached the 105 level, from where it has retreated twice before. Bears may try to defend the 105 level again.”

Looks like bears did a pretty good job of defending the 105 level once again. Oil’s price dropped below its 20 day EMA, but found good support from its rising 50 day EMA and bounced up sharply to close just below the 105 level with a decent uptick in volumes.

Can the bulls overcome bear resistance at 105 this time around? Technical indicators seem to be suggesting as much. MACD has crossed above its signal line in positive zone. RSI took support at its 50% level to move up sharply towards its overbought zone. Slow stochastic recovered from a brief dip below its 50% level and has returned to bullish territory.

On longer term weekly chart (not shown), all three EMAs are rising and oil’s price is trading above them in a long term bull market. The price band between 105-108 is a resistance zone. If bulls are able to cross that zone, oil’s price can rise to 110.

Brent Crude chart


In a technical update to the 6 months daily bar chart pattern of Brent Crude oil posted two weeks back, investors were cautioned as follows: “It may be a bit early for bulls to celebrate. All three technical indicators are looking bullish, but showing negative divergences by failing to touch higher tops. A correction may follow.”

A sharp correction pushed oil’s price down below its three EMAs into bear territory, but not for long. Yesterday, oil’s price bounced up on good volumes above its 200 day and 50 day EMAs and closed exactly at its 20 day EMA.

Technical indicators are beginning to turn bullish. MACD is below its signal line in positive zone, but appears to have stopped falling. RSI spent a few days below its 50% level but has managed to move back into bullish zone. Slow stochastic has taken support from the edge of its oversold zone, and started moving up.

On longer term weekly chart (not shown), oil’s price is trading above its three weekly EMAs. Weekly technical indicators are in bullish zones.

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