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Tuesday, May 30, 2017

WTI and Brent Crude Oil charts: bears strike again

WTI Crude Oil chart


The following comments appeared in the previous post on the daily bar chart pattern of WTI Crude Oil: "The rally may continue till 51-51.50. Expect bears to start selling at any time."

Oil's price rallied to touch a high of 52 on Thu. May 25 '17 but plummeted below all three EMAs to 48.50 with a huge volume spike - forming a large 'reversal day' bar (higher high, lower close).

On Fri. May 26, oil's price dropped a little lower, but bounced up to close exactly at its 50 day EMA - forming another 'reversal day' bar (lower low, higher close).

OPEC and non-OPEC producers agreed to extend current level of production cuts till Mar '18. The market was perhaps expecting additional cuts - or, it was a case of 'sell on news'. The reasons don't really matter.

Since the beginning of the year, oil's price has formed a bearish pattern of 'lower tops, lower bottoms'. Till that pattern gets reversed, expect bears to sell on every rise.

Daily technical indicators are looking neutral to bearish. MACD and RSI are in neutral zones, but not showing much upward momentum. Slow stochastic has dropped sharply from its overbought zone.

Huge oil inventories in USA and oversupply in the market is likely to keep prices depressed. Saudi Arabia is trying to 'balance' the market by cutting exports to USA.

On longer term weekly chart (not shown), oil's price formed a 'reversal bar' and closed well below its 200 week EMA in a long-term bear market. Weekly technical indicators are in neutral zones. Only Slow stochastic is showing some upward momentum.

Brent Crude Oil chart


The following comments appeared in the previous post on the daily bar chart pattern of Brent Crude Oil: "The rally may have further upside - to 53-53.50. But bears are likely to 'sell the rise' at any time."

Oil's price rallied past 54.50 intra-day on Wed. May 24, but dropped to close below 54. The next day, it again crossed above 54.50 intra-day, but plunged below its three EMAs to 51 on the back of a strong volume surge.

On Fri. May 26, oil's price bounced up to close at its 50 day EMA - and above its 20 day and 200 day EMAs in bull territory. 

But the bearish pattern of 'lower tops, lower bottoms' since the beginning of the year is still in force. Bears are very much on top.

Daily technical indicators are not showing any upward momentum. MACD and RSI are at their respective neutral zones. Slow stochastic has fallen like a stone from its overbought zone.

Expect bears to continue their selling at every rise.

On longer term weekly chart (not shown), oil's price formed a 'reversal bar' and closed well below its sliding 200 week EMA in a long-term bear market. Weekly technical indicators are in neutral zones. Only Slow stochastic is showing some upward momentum.

1 comment:

Subhankar said...

$25 oil is coming, and a new world order along with it, think tanks says

https://in.finance.yahoo.com/news/reporter-apos-notebook-warned-25-012302107.html