Tuesday, June 5, 2018

WTI and Brent Crude Oil charts: bear onslaught forces bull retreat

WTI Crude Oil chart


The following comments appeared in the previous post on the daily bar chart pattern of WTI Crude Oil: "Daily technical indicators are looking overbought and showing negative divergences by failing to touch new highs with oil's price. Falling volumes during the last leg of the rally is also a bearish sign... some correction or consolidation may be on the cards."

Oil's price touched an intra-day high of 72.83 on May 22, but formed a 'reversal day' bar (higher high, lower close) that often marks an intermediate top. A combination of profit booking and bear selling triggered a sharp correction below the 20 day and 50 day EMAs.

A brief upward bounce from the 'Support/Resistance zone' (between 66 & 67) and a close above the 50 day EMA on May 30 was met with more bear selling. Oil's price closed below the 'Support/Resistance zone' after 7 weeks, but above its 200 day EMA in bull territory.

Daily technical indicators are showing downward momentum in bearish zones. Slow stochastic is well inside its oversold zone. A likely pullback towards the 'Support/Resistance zone' will provide bears another selling opportunity.

On longer term weekly chart (not shown), oil's price closed below its 20 week EMA but above its 50 week and 200 week EMAs. Weekly technical indicators have corrected overbought conditions. MACD is falling in bullish zone. RSI is seeking support from its 50% level. Slow stochastic has slipped below its 50% level - hinting at some more correction.

Brent Crude Oil chart


The daily bar chart pattern of Brent Crude Oil formed a small 'double top' reversal pattern by touching 80.50 intra-day on May 17 & 22. That triggered a correction below its 20 day EMA but found good support from 'Support/Resistance zone 2' (between 73 & 75).

Oil's price is trading above its 50 day and 200 day EMAs in bull territory, but the corrective move may continue a while longer.

Daily technical indicators have corrected overbought conditions and are showing downward momentum. MACD is falling in bullish zone. RSI and Slow stochastic are falling below their 50% levels.

On longer term weekly chart (not shown), oil's price closed above its three weekly EMAs in long-term bull territory. Weekly technical indicators are correcting overbought conditions. Some more correction and/or consolidation is likely.

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