WTI Crude Oil chart
The daily bar chart pattern of WTI Crude Oil shows a strong fightback by bulls just when bears were gaining the upper hand. After falling below 64 on Jun 18. oil's price gained more than 10 points (16.6%) by closing above 74 on Jun 29.
What happened? Wasn't increase in production by the OPEC cartel supposed to put a lid on oil's price? Firstly, the increase of 1 Million barrels/day was less than market expectations. Secondly, Trump's sanctions on Iran's oil exports raised the spectre of supply constraints.
Lastly, uncertainty over supply outages in Libya due to an armed struggle and falling North American inventories combined to create a perfect speculative environment for bulls.
The speculative nature of oil's price rise last week is visible on the sliding volume bars and the sharp price rise above the three daily EMAs. Such sudden price spikes are unsustainable.
Daily technical indicators are looking overbought. MACD is showing upward momentum but negative divergence by failing to touch a new high with oil's price. Upward momentum on RSI and Slow stochastic have stalled. A correction can start at any time.
On longer term weekly chart (not shown), oil's price closed well above its three weekly EMAs in long-term bull territory. Weekly technical indicators are looking overbought and showing negative divergences by failing to touch new highs with oil's price. Some correction or consolidation is likely.
Brent Crude Oil chart
The following comments were made in the previous post on the daily bar chart pattern of Brent Crude Oil: "On Mon. Jun 18, oil's price formed a large 'reversal day' bar by falling lower to the edge of the channel, only to bounce up and close above its 50 day EMA. Another attempt may be made by bulls to breach the upper edge of the channel."
On Jun 20, oil's price faced resistance from its 20 day EMA, and dropped to seek support from the lower edge of 'Support/Resistance zone 2' the next day. The subsequent rally led to a breakout above the channel (Flag) pattern on Jun 27.
Good volume support technically validated the upward breakout. Oil's price touched a lower top of 79.70 on Jun 29, which triggered a pullback towards the top of the 'Flag'. The 77 level has provided some support.
Daily technical indicators are in bullish zones, but not showing any upward momentum. MACD is moving sideways above its signal line. RSI is falling towards its 50% level. Slow stochastic is moving down in overbought zone. Some consolidation or correction is likely.
On longer term weekly chart (not shown), oil's price received support from its 20 week EMA, and closed above its three weekly EMAs in long-term bull territory. Weekly technical indicators have corrected overbought conditions, but remain in bullish zones.
The daily bar chart pattern of WTI Crude Oil shows a strong fightback by bulls just when bears were gaining the upper hand. After falling below 64 on Jun 18. oil's price gained more than 10 points (16.6%) by closing above 74 on Jun 29.
What happened? Wasn't increase in production by the OPEC cartel supposed to put a lid on oil's price? Firstly, the increase of 1 Million barrels/day was less than market expectations. Secondly, Trump's sanctions on Iran's oil exports raised the spectre of supply constraints.
Lastly, uncertainty over supply outages in Libya due to an armed struggle and falling North American inventories combined to create a perfect speculative environment for bulls.
The speculative nature of oil's price rise last week is visible on the sliding volume bars and the sharp price rise above the three daily EMAs. Such sudden price spikes are unsustainable.
Daily technical indicators are looking overbought. MACD is showing upward momentum but negative divergence by failing to touch a new high with oil's price. Upward momentum on RSI and Slow stochastic have stalled. A correction can start at any time.
On longer term weekly chart (not shown), oil's price closed well above its three weekly EMAs in long-term bull territory. Weekly technical indicators are looking overbought and showing negative divergences by failing to touch new highs with oil's price. Some correction or consolidation is likely.
Brent Crude Oil chart
The following comments were made in the previous post on the daily bar chart pattern of Brent Crude Oil: "On Mon. Jun 18, oil's price formed a large 'reversal day' bar by falling lower to the edge of the channel, only to bounce up and close above its 50 day EMA. Another attempt may be made by bulls to breach the upper edge of the channel."
On Jun 20, oil's price faced resistance from its 20 day EMA, and dropped to seek support from the lower edge of 'Support/Resistance zone 2' the next day. The subsequent rally led to a breakout above the channel (Flag) pattern on Jun 27.
Good volume support technically validated the upward breakout. Oil's price touched a lower top of 79.70 on Jun 29, which triggered a pullback towards the top of the 'Flag'. The 77 level has provided some support.
Daily technical indicators are in bullish zones, but not showing any upward momentum. MACD is moving sideways above its signal line. RSI is falling towards its 50% level. Slow stochastic is moving down in overbought zone. Some consolidation or correction is likely.
On longer term weekly chart (not shown), oil's price received support from its 20 week EMA, and closed above its three weekly EMAs in long-term bull territory. Weekly technical indicators have corrected overbought conditions, but remain in bullish zones.
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