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Tuesday, December 9, 2014

WTI and Brent Crude Oil charts: fall to 5 year lows

WTI Crude chart

WTI Crude_Dec0814

In its previous attempt at a rally two weeks back, the daily bar chart pattern of WTI Crude oil had tested resistance from its falling 20 day EMA and resumed its downward journey. On Dec 8 ‘14, oil’s price touched a 5 year low of 63 -  and may fall even lower.

Daily technical indicators are in their respective oversold zones. MACD is diving deeper, but RSI and Slow stochastic are showing positive divergences by touching higher bottoms while oil’s price fell lower.

Oil’s price is trading well below its 20 day EMA. A bounce up is a possibility. But bears are in no mood to relent. Every rise is being used to sell.

On longer term weekly chart (not shown), oil’s price has closed below its 200 week EMA for 14 straight weeks. Weekly technical indicators are falling deeper inside their respective oversold zones. The 50 week EMA has crossed below the 200 week EMA – the ‘death cross’ technically confirming a long-term bear market.

Brent Crude chart

BrentCrude_Dec0814 

The daily bar chart pattern of Brent Crude oil continued its waterfall-like descent, touching a 5 year low of 66 on Dec 8 ‘14. The recent OPEC meeting ended without an agreement about reducing oil production in a market flooded with oversupply and shrinking demand. Bears pounced on the opportunity and pushed prices lower.

Daily technical indicators are in their respective oversold zones. While MACD is still falling, RSI and Slow stochastic are showing positive divergences by not moving lower with oil’s price. A rally may ensue – but is likely to encounter bear selling again.

On longer term weekly chart (not shown), oil’s price has closed below its 200 week EMA for 17 weeks in a row. Weekly technical indicators have fallen deeper inside their respective oversold zones. The ‘death cross’ of the 50 week EMA below the 200 week EMA had technically confirmed a long-term bear market.

1 comment:

Subhankar said...

Saudi Arabia is playing chicken with its oil:

http://blogs.reuters.com/great-debate/2014/12/15/saudi-arabia-is-playing-chicken-with-its-oil/