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Tuesday, March 10, 2015

WTI and Brent Crude Oil charts: sideways consolidations continue

WTI Crude chart

WTI Crude_Mar0915

The daily bar chart pattern of WTI Crude oil continued its sideways consolidation in a range between 47.50 and 54.50. The support level of 47.50 was not breached – which is good news for bulls.

The bad news is that the falling 50 day EMA is providing strong resistance on the upside. The brief rally is trying to stabilise oil’s price at the 50 level (which is also the level of the 20 day EMA) – but for how long?

Daily technical indicators are in bearish zones. MACD is entangled with its signal line, and moving sideways just below the ‘0’ line. RSI is also moving sideways slightly below its 50% level. Slow stochastic has turned down after failing to cross above its 50% level.

On longer term weekly chart (not shown), oil’s price is trading well below its three weekly EMAs in a long-term bear market. Weekly technical indicators are looking oversold, but showing signs of upward momentum. A downward break out below the consolidation range is the likely outcome.

Brent Crude chart

BrentCrude_Mar0915

The daily bar chart pattern of Brent Crude oil could not move above the resistance level of 64, and has slipped down below its 50 day and 20 day EMAs. Note that the 20 day EMA failed to cross above the 50 day EMA. The short-term bullish sentiment is fading.

Daily technical indicators are turning bearish. MACD formed a ‘rounding top’ pattern and crossed below its signal line in positive zone. RSI is about to drop below its 50% level. Slow stochastic has already fallen below its 50% level, and is showing increasing downward momentum.

On longer term weekly chart (not shown), oil’s price is trading below its three weekly EMAs in a long-term bear market. Technical indicators corrected oversold conditions, but their upward momentum is diminishing. If the 55 level gets breached, oil’s price may test its Jan ‘15 low.

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