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Tuesday, July 25, 2017

WTI and Brent Crude Oil charts: bears still on top, but bulls trying to fight back

WTI Crude Oil chart


The daily bar chart pattern of WTI Crude Oil shows a spirited fightback by bulls just when bear domination appeared complete.

Oil's price formed a 'reversal day' bar (slightly lower low, slightly higher close) on Jul 10, which triggered a second leg of the rally from its Jun 21 low of 42. 

Note that the second leg of the rally (from the Jul 10 higher bottom) has been supported by stronger volumes, which is a bullish sign.

Oil's price rose above its 20 day and 50 day EMAs to touch an intra-day high of 47.55 on Jul 20 - falling short of its sliding 200 day EMA. 

Profit booking led to the formation of a 'reversal day' bar (higher high, lower close) and a correction below 20 day and 50 day EMAs on Jul 21. A pullback on Jul 24 is facing resistance from the 50 day EMA.

Daily technical indicators are in bullish zones, but not showing any upward momentum. Slow stochastic has dropped like a stone from its overbought zone. Any attempt by bulls to take oil's price above its 200 day EMA is likely to invite bear selling.

On longer term weekly chart (not shown), oil's price faced resistance from its falling 20 week EMA and closed below its three sliding weekly EMAs in a long-term bear market. Weekly technical indicators are in bearish zones, but Slow stochastic is showing upward momentum.

Brent Crude Oil chart


The daily bar chart pattern of Brent Crude Oil seemed to move in lock-step with WTI Crude oil's chart. It touched a higher bottom on Jul 10 and started a second leg of the rally from its Jun 21 low of 44.35.

After touching an intra-day high of 50.20 on Jul 20 and failing to test resistance from its 200 day EMA, oil's price formed a 'reversal day' bar (higher high, lower close).

That triggered a correction below its 20 day and 50 day EMAs on Jul 21. On Jul 24, oil's price bounced up above its 20 day EMA.

Daily technical indicators are not looking bullish. MACD and RSI are at their neutral zones and not showing much upward momentum. Slow stochastic touched a lower top inside its overbought zone - forming a 'double top' reversal pattern, and fell sharply towards its 50% level.

Bears are selling at every rise, keeping oil's price below 50 for almost two months.

On longer term weekly chart (not shown), oil's price faced resistance from its falling 20 week EMA and closed below its three sliding weekly EMAs for the 8th week in a row. Weekly technical indicators are in bearish zones. MACD and RSI are moving sideways, but Slow stochastic is showing upward momentum.

1 comment:

Subhankar said...

Why Oil Prices Are Headed Even Lower

http://www.investopedia.com/news/why-oil-prices-are-headed-even-lower/