WTI Crude chart
The daily bar chart pattern of WTI Crude oil halted for a few days around the 55 level in Dec ‘14. But it was just a temporary pause. The down move resumed in earnest. The psychological level of 50 was breached easily as oil’s price plunged to 6 yr lows.
All three technical indicators are well inside their respective oversold zones, but showing positive divergences by touching slightly higher bottoms. Bulls need not hope for any reversal of trend. The bear grip is too strong.
How much lower can oil’s price fall? Already experts are discussing targets below 30. Adequate supply and weak global demand have been compounded by OPEC’s failure to agree on a production cut.
On longer term weekly chart (not shown), oil’s price is falling like a stone below its three weekly EMAs in a long-term bear market. Weekly technical indicators are sliding deeper inside their respective oversold zones. There is no sign of a bottom formation.
Brent Crude chart
The daily bar chart pattern of Brent Crude oil tried to find a bottom at 60, but gave up after a few days. A slight pause at the psychological level of 50 was followed by a drop to a 6 yr low.
Technical indicators are well inside their respective oversold zones, but showing positive divergences by not touching new lows with oil’s price. That doesn’t mean that the slide in oil’s price will stop any time soon.
On longer term weekly chart (not shown), all three weekly EMAs are falling, and oil’s price is falling well below them in a long-term bear market. Technical indicators are sliding deeper inside their respective oversold zones.