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Tuesday, September 22, 2015

WTI and Brent Crude Oil charts: an update

WTI Crude chart

WTIC_Sep2115

The daily bar chart pattern of WTI Crude oil has been consolidating sideways within a ‘symmetrical triangle’ pattern for the past couple of weeks. Oil’s price has managed to close slightly above its 50 day EMA, but continues to trade well below its falling 200 day EMA in a bear market.

‘Symmetrical triangle’ pattern tends to be unreliable. The eventual break out can be upwards, downwards or sideways through the apex of the triangle. So, it is better to wait for the break out before initiating any buy/sell action.

Daily technical indicators are in bullish zones but giving mixed signals – which is typical during sideways consolidations. MACD has managed to move up into positive territory above its rising signal line, but its upward momentum is waning. RSI is zigzagging sideways along its 50% level. Slow stochastic is sliding down towards its 50% level.

On longer term weekly chart (not shown), oil’s price faced resistance from its falling 20 week EMA and is trading below its three weekly EMAs in a long-term bear market. Weekly technical indicators have corrected oversold conditions but remain in bearish zones.

Brent Crude chart

BRENT_Sep2115

The daily bar chart pattern of Brent Crude oil has been consolidating sideways within a triangle pattern with a downward bias. Oil’s price has closed below its three EMAs in a bear market.

Of late, up day volumes have been higher than down day volumes – which is probably more due to short covering than any actual buying interest.

All three daily technical indicators are in bearish zones. MACD is moving sideways above its signal line in negative territory. RSI is also moving sideways just below its 50% level. Slow stochastic is falling sharply towards its oversold zone.

A downward break out from the triangle appears likely. Since triangle patterns are unreliable, it may be prudent to wait for the break out before going short or long.

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 corrected oversold conditions and are moving sideways in bearish zones. Lower price levels are likely.

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