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Tuesday, September 13, 2016

WTI and Brent Crude Oil charts: consolidating sideways within 'triangle' patterns

WTI Crude Oil chart

The daily bar chart pattern of WTI Crude Oil has been consolidating sideways within a large 'triangle' pattern for the past three months - alternatively rising above and falling below the 200 day EMA.

Oil's price is trading above its gradually rising 200 day EMA. Volumes have been stronger on recent up-days. These are signs that bulls are at a slight advantage. 

Daily technical indicators are in bullish zones, but MACD and RSI are not showing much upward momentum. Some more consolidation within the 'triangle' is likely.

Oil's price touched a lower top on Sep 8, and failed to test resistance from the upper edge of the 'triangle'. That may lead to a drop below the 'triangle'.

A 'triangle' pattern is unreliable. So, it is better to wait for the breakout before initiating any buy/sell decision. 

On longer term weekly chart (not shown), oil's price is trading above its entangled 20 week and 50 week EMAs but well below its sliding 200 week EMA in a long-term bear market. Weekly technical indicators are in bullish zones, but MACD and Slow stochastic are not showing any upward momentum.

Brent Crude Oil chart

The following remarks were made in the previous post on the daily bar chart pattern of Brent Crude Oil: "Daily technical indicators are in the process of correcting overbought conditions. A pullback towards the 200 day EMA is a possibility."

Oil's price dropped and closed below its 200 day EMA on Sep 1, but bounced up the very next day. It crossed the 50 level intra-day on Sep 8, but failed to test resistance from the upper edge of the 'triangle'. That may lead to a correction below the 'triangle'. 

A 'triangle' pattern is unreliable because a breakout can occur in either direction. It may be a good idea to wait for the eventual breakout before deciding to buy/sell.

On longer term weekly chart (not shown), oil's price is trading above its 20 week and 50 week EMAs but well below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are in bullish zones, but none are showing any upward momentum.

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