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Tuesday, April 4, 2017

WTI and Brent Crude Oil charts: form reversal patterns and bounce back into bull territories

WTI Crude Oil chart


The daily bar chart pattern of WTI Crude Oil had corrected sharply below its 200 day EMA into bear territory, but bounced up after receiving support from the 47 level.

Oil's price failed to sustain above its 200 day EMA for long, and dropped to seek support from the 47 level once again. Note that a 'triple bottom' reversal pattern got formed at 47.

Daily technical indicators corrected oversold conditions, and formed reversal patterns of their own. MACD's signal line has formed a 'rounding bottom' pattern. RSI and Slow stochastic formed 'double bottom' patterns inside their oversold zones.

Those were triggers for oil's price to bounce back into bull territory. After crossing above its 200 day and 20 day EMAs, some resistance is being faced from the 50 day EMA.

Sliding volumes during the past three trading sessions is a concern for bulls. MACD is still in bearish zone. RSI is in neutral zone. Slow stochastic is looking overbought.

Expect some consolidation around current levels. But global inventories remain stubbornly high and investors are betting that it will take many months for oil prices to respond convincingly to lower OPEC output.

On longer term weekly chart (not shown), oil's price has crossed above its 50 week EMA but is facing resistance from its 20 week EMA. It closed well below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are looking neutral to bearish.

Brent Crude Oil chart


The daily bar chart pattern of Brent Crude Oil faced a sharp correction below its three EMAs into bear territory. It slipped below the 50 level intra-day on Mar 22, but has recovered smartly after forming a small 'double bottom' reversal pattern.

All three daily technical indicators also formed reversal patterns. MACD's signal line formed a 'rounding bottom' pattern. RSI and Slow stochastic formed 'double bottom' patterns inside their oversold zones.

Oil's price rose above its three EMAs with good volume support, but dropped below its 50 day EMA. MACD is rising above its signal line in negaive zone. RSI is in neutral zone. Slow stochastic has entered its overbought zone, but its upward momentum has stalled.

The conflicting signals from the technical indicators may be hinting at some price consolidation around current levels.

On longer term weekly chart (not shown), oil's price is facing resistance from its 20 week EMA after crossing above its 50 week EMA. It closed well below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are looking neutral to bearish.

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