WTI Crude Oil chart
The following comments appeared in the previous post on the daily bar chart pattern of WTI Crude Oil: "Expect some more consolidation before another breakout can occur. Logically, the breakout should be upwards because oil's price is in a bull market. However, it is better to wait for the breakout because a 'triangle' pattern is unreliable."
As expected, oil's price continued to consolidate sideways within a 'symmetrical triangle' pattern in a bull market. The entire pattern has formed above the rising 50 day and 200 day EMAs, so the logical breakout should be upwards. But logic doesn't always work for 'triangle' patterns.
Daily technical indicators are giving conflicting signals, which is often the case during periods of consolidation. MACD and RSI are showing downward momentum in bullish zones. Slow stochastic is showing upward momentum in bearish zone.
Oil's price may consolidate a while longer before the supply/demand balance gets tilted to one side. Which side?
U.S. shale supply, the IEA said in its December Oil Market Report, is set to grow more than OPEC has estimated and this could be the undoing of the production cut that boosted prices this year.
On longer term weekly chart (not shown), oil's price has been struggling to close above its 200 week EMA. Weekly MACD and Slow stochastic are beginning to correct inside their overbought zones. RSI is moving sideways in bullish zone.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude Oil has been consolidating sideways since the beginning of Nov '17. The earlier 'triangle' pattern has been modified to a 'rectangle' pattern based on the trading pattern of the past two weeks.
(There is nothing unusual in such modifications. A developing pattern often changes shape, which should be incorporated to reflect the change. The important point to note is that a 'triangle' and a 'rectangle' are both sideways consolidation patterns.)
On Mon. Dec 11, oil's price rose sharply to 64.93 due to a crack in a North Sea pipeline that caused a shut down. The next day, oil's price broke out above the 'rectangle' to an intra-day high of 65.83, but closed well inside the 'rectangle' at 63.34 - forming a 'reversal day' (higher high, lower close) bar that triggered a correction below its 20 day EMA.
Daily technical indicators are giving conflicting signals, which often happens during periods of consolidation. MACD is showing downward momentum in bullish zone. RSI is moving sideways in bullish zone. Slow stochastic is showing upward momentum in bearish zone.
Trading on Mon. Dec 18 formed a 'doji' candlestick pattern that indicates indecision among bulls and bears. Some more consolidation within the 'rectangle' is likely before an eventual breakout.
On longer term weekly chart (not shown), oil's price is consolidating sideways just above its 200 week EMA in long-term bull territory. Weekly technical indicators have started to correct overbought conditions.
The following comments appeared in the previous post on the daily bar chart pattern of WTI Crude Oil: "Expect some more consolidation before another breakout can occur. Logically, the breakout should be upwards because oil's price is in a bull market. However, it is better to wait for the breakout because a 'triangle' pattern is unreliable."
As expected, oil's price continued to consolidate sideways within a 'symmetrical triangle' pattern in a bull market. The entire pattern has formed above the rising 50 day and 200 day EMAs, so the logical breakout should be upwards. But logic doesn't always work for 'triangle' patterns.
Daily technical indicators are giving conflicting signals, which is often the case during periods of consolidation. MACD and RSI are showing downward momentum in bullish zones. Slow stochastic is showing upward momentum in bearish zone.
Oil's price may consolidate a while longer before the supply/demand balance gets tilted to one side. Which side?
U.S. shale supply, the IEA said in its December Oil Market Report, is set to grow more than OPEC has estimated and this could be the undoing of the production cut that boosted prices this year.
On longer term weekly chart (not shown), oil's price has been struggling to close above its 200 week EMA. Weekly MACD and Slow stochastic are beginning to correct inside their overbought zones. RSI is moving sideways in bullish zone.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude Oil has been consolidating sideways since the beginning of Nov '17. The earlier 'triangle' pattern has been modified to a 'rectangle' pattern based on the trading pattern of the past two weeks.
(There is nothing unusual in such modifications. A developing pattern often changes shape, which should be incorporated to reflect the change. The important point to note is that a 'triangle' and a 'rectangle' are both sideways consolidation patterns.)
On Mon. Dec 11, oil's price rose sharply to 64.93 due to a crack in a North Sea pipeline that caused a shut down. The next day, oil's price broke out above the 'rectangle' to an intra-day high of 65.83, but closed well inside the 'rectangle' at 63.34 - forming a 'reversal day' (higher high, lower close) bar that triggered a correction below its 20 day EMA.
Daily technical indicators are giving conflicting signals, which often happens during periods of consolidation. MACD is showing downward momentum in bullish zone. RSI is moving sideways in bullish zone. Slow stochastic is showing upward momentum in bearish zone.
Trading on Mon. Dec 18 formed a 'doji' candlestick pattern that indicates indecision among bulls and bears. Some more consolidation within the 'rectangle' is likely before an eventual breakout.
On longer term weekly chart (not shown), oil's price is consolidating sideways just above its 200 week EMA in long-term bull territory. Weekly technical indicators have started to correct overbought conditions.
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