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Tuesday, June 27, 2017

WTI and Brent Crude Oil charts: bears continue to rule

WTI Crude Oil chart


The following comment had appeared in the previous post on the daily bar chart pattern of WTI Crude Oil: "Strong volumes on recent down days show that bears are in no mood to relinquish control."

Since the beginning of the month, resistance from the falling 20 day EMA has proven to be insurmountable for bulls. 

Oil's price dropped below the May 5 low of 43.75 and touched a low of 42 on Jun 21 with a strong surge in volumes. The bearish pattern of 'lower tops, lower bottoms' remains intact.

Daily technical indicators are looking oversold, and triggered a technical bounce. Oil's price is trading below its three falling EMAs in a bear market. Expect bears to resume selling if bulls try to engineer a rally.

A fuel glut in China, a hangover from demonetisation in India, and an ageing, declining population in Japan are holding back crude oil demand growth in three of the world's top four oil buyers.

On longer term weekly chart (not shown), oil's price closed below its three weekly EMAs in a long-term bear market. Weekly technical indicators are in bearish zones.

Brent Crude Oil chart


The daily bar chart pattern of Brent Crude Oil shows total bear domination. The 'death cross' of the 50 day EMA below the 200 day EMA has technically confirmed a return to a bear market.

Oil's price fell below its May 5 low - keeping the bearish pattern of 'lower tops, lower bottoms' intact. 

After touching a low of 44.35 on Jun 21, a short-covering rally was triggered by oversold technical indicators.

Despite production cuts by OPEC members, a supply glut in the oil market has kept a lid on prices. Expect bears to sell again if the rally continues a little longer.

On longer term weekly chart (not shown), oil's price remains well below its three weekly EMAs in a long-term bear market. Weekly technical indicators are bearish.

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