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Tuesday, December 23, 2014

WTI and Brent Crude Oil charts: an update

WTI Crude chart

WTI Crude_Dec2214

The following comment appeared on a previous post on the daily bar chart pattern of WTI Crude oil: “…oil’s price touched a 5 year low of 63 -  and may fall even lower.” After falling below 55, oil’s price has been consolidating sideways in an effort to find a bottom around 55.

All three technical indicators have formed bullish ‘rounding bottom’ patterns inside their respective oversold zones. Does that mean that the strong down trend is about to get reversed?

Strong volumes and sharp volatility in the past few trading sessions indicate investor uncertainty – which often precedes a trend change. However, bears have a strong grip which they are unlikely to release in a hurry. Any upward bounce may be used to sell.

On longer term weekly chart (not shown), oil’s price is trading well below its three weekly EMAs in a long-term bear market. However, the fall since Jul ‘14 has been a bit too sharp. A bounce up is a possibility. Weekly technical indicators are well inside their oversold zones.

Brent Crude chart

BrentCrude_Dec2214

The daily bar chart pattern of Brent Crude oil continued its waterfall-like descent and slipped below the 60 level. For the past 4 trading sessions, oil’s price has been consolidating sideways as it tries to find a bottom around 60.

MACD, RSI and Slow stochastic are still inside their respective oversold zones – though all three have formed ‘rounding bottom’ patterns that may lead to an upward bounce in oil’s price. Will it provide a bottom-fishing opportunity? Not really.

On longer term weekly chart (not shown), all three weekly EMAs are falling, and oil’s price is trading below them in a long-term bear market. Technical indicators are well inside their oversold zones.

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