Adapt To A Bear Market

Witnessing a bear market for stocks doesn't have to be about suffering and loss, even though some cash losses may be unavoidable.

Instead, investors should always try to see what is presented to them as an opportunity - a chance to learn about how markets respond to the events surrounding a bear market or any other extended period of dull returns.

Read on to learn about how to weather a downturn:

https://www.investopedia.com/articles/younginvestors/08/bear-market.asp

4 Ways To Survive and Prosper in a Bear Market

A bear market for stocks could be coming.  After a nine-year bull market, there is always the chance that a bear market could be right around the corner.  The problem is, it can be hard to know when it’s coming, how long it will last or how severely it will impact stock prices.  

So it’s always safe to say that a bear market is coming…eventually.  And it’s always good to know some of the precursors and ways to hedge.

There is no reason to be alarmed.  Not only can you survive the next bear market, you can even prosper from it.  Below are some techniques you can use to either reduce your portfolio losses or even to make some money off the big bad bear. 

Read more at:
https://www.investopedia.com/articles/investing/070115/4-ways-survive-and-prosper-bear-market.asp

'Rolling Bear Market' Will Paralyze Stocks for Years: Morgan Stanley

U.S. stock investors should brace for a market that will be paralyzed for several years in a narrow trading range, according to one team of analysts on the Street, and as reported by CNBC. 

Investors are already in the midst of a "rolling bear market" that will push the S&P 500 down as much as 17% and no higher than 4% from today's levels, Morgan Stanley's chief equity strategist, Michael Wilson, told clients in a recent note.

"We think this 'rolling bear market' has already begun with peak valuations in December and peak sentiment in January," stated Wilson. 

Read more at: 
https://www.investopedia.com/news/rolling-bear-market-will-paralyze-stocks-years-morgan-stanley/

Gold and Silver charts: struggling in strong bear grips

Gold chart pattern

The daily bar chart pattern of Gold has been consolidating sideways for the past two weeks. It faced strong resistances from its falling 20 day EMA and the 'Support/Resistance zone 2' (between 1237 & 1248).

The 200 day EMA has formed a bearish 'rounding top' pattern. All three EMAs are falling. Gold's price is trading below them in a bear market, but is trying to find support from the zone between 1200 & 1210.

Daily technical indicators have corrected oversold conditions, but are not showing any upward momentum. Expect the sideways consolidation to continue a while longer.

Bulls may indulge in bottom fishing after a sharp fall. Bears are unlikely to release their strong grip on the chart. 

On longer term weekly chart (not shown), gold’s price closed well below its three weekly EMAs in long-term bear territory.  Weekly technical indicators are looking bearish and oversold. The 20 week EMA has crossed below the 200 week EMA. The 50 week EMA has formed a bearish 'rounding top' pattern and is falling towards the 200 week EMA.

Silver chart pattern

The daily bar chart pattern of Silver has been consolidating sideways for the past two weeks. It faced resistance from 'Support/Resistance zone' (between 15.60 & 15.80) and remained below its falling 20 day EMA.

All three EMAs are falling. Silver's price is trading below them in a bear market, but is trying to find support from the zone between 15.10 & 15.20.

Daily technical indicators have failed to emerge from bearish zones after correcting oversold conditions. Expect bears to sell on every rise to maintain their domination.

On longer term weekly chart (not shown), silver’s price closed below its three falling weekly EMAs in a long-term bear market. Weekly MACD and RSI are falling in bearish zones. Slow stochastic is falling inside its oversold zone.

Are you a bull or a bear? Why not both?

Most small investors thrive in bull markets. They feel comfortable by buying low and selling high. The adventurous buy high and sell higher. The sophisticated buy more on small corrections to support levels. They make the trend their friend.

All their best laid plans go haywire when bears attack. Panic sets in as portfolio values go crashing. Stock prices fall below 'buy' prices. Some book losses and get out, promising never to come back again.

Others make a bad problem worse. They start 'averaging down' - buying more at lower prices. When the stock shows no sign of recovering, they lose heart and book huge losses.

What happened to making the trend a friend? The analytical side of the brain gets scrambled when money is rapidly going down the drain. The only thought is 'take the money and run'.

The smart ones - they become that way after losing money in bear markets - know that you can be a bull AND a bear depending on the trend. 'Buy the dips' when the trend is up. 'Sell on rise' when the trend is down.

The 'buy the dips' is the easier strategy to follow. No wonder small investors prefer it. You keep buying as a stock's price moves up. No selling is involved - till you decide to book profits when upward target is met.

'Sell on rise' is harder, and requires practice to succeed. For every sell, you need to buy back at a lower price. And then repeat the process - till the correction ends. Deciding when to buy back requires skill.

Studying long-term technical chart patterns to identify support and resistance levels can prove invaluable for identifying entry and exit points. 

Sometimes stocks get into consolidation phases that can last months. What to do then? If the consolidation range is reasonably wide - say, 40-50 points instead of 10-15 points - draw a line through the middle of the range. 'Buy the dips' below the mid-point, 'sell on rise' above the mid-point.

For longer term investors, it is better to be a crocodile or a python (both have a lot of patience) instead of a bull or a bear during consolidation phases. Just wait patiently for a price breakout in either direction.

WTI and Brent Crude Oil charts: bears have the upper hand as bulls fail to extend pullback rallies

WTI Crude Oil chart

The daily bar chart pattern of WTI Crude Oil attempted a breakout above a sideways consolidation zone between the 200 day EMA and the 50 level, and touched a lower top of 50.22 on Thu. Aug 10.

Formation of a 'reversal day' bar (higher high, lower close) accompanied by a volume surge put paid to bullish hopes of extending the pullback rally any further.

Oil's price corrected below its three EMAs into bear territory and touched a low of 46.46 on Thu. Aug 17. Formation of another 'reversal day' bar (lower low, higher close) led to a technical bounce above the three EMAs on Fri. Aug 18.

Bear selling on Mon. Aug 21 has dropped oil's price below its three EMAs into bear territory once again. The bearish pattern of 'lower tops, lower bottoms' - which has dominated the chart for the past 6 months - continues.

Daily technical indicators are looking bearish. MACD is falling below its signal line in bullish zone. RSI has slipped below its 50% level. Slow stochastic has emerged from its oversold zone, and can trigger a technical bounce. Bears may use such a bounce to sell again.

On longer term weekly chart (not shown), oil's price closed below its 20 week and 50 week EMAs and well below its falling 200 week EMA in a long-term bear market. Weekly MACD and RSI are in neutral zones. Slow stochastic is showing downward momentum in bullish zone.

Brent Crude Oil chart

The following comments appeared in the previous post on the daily bar chart pattern of Brent Crude Oil: "Bulls may make an attempt to push oil's price above the May 25 top of 54.67 to breakout of the bearish pattern of 'lower tops, lower bottoms'. Strong volumes on recent down days mean bears will resist any such attempt." 

Oil's price touched an intra-day high of 53.64 on Thu. Aug 10, but formed a 'reversal day' bar (higher high, lower close) and corrected below its three EMAs into bear territory.

Good support from the 50 level triggered a technical bounce back into bull territory. Resistance from the 53 level prevented the rally from extending any further.

Daily MACD and RSI are in bullish zones but showing slight downward momentum. Slow stochastic has risen from its oversold zone but is facing resistance from its 50% level.

The bearish pattern of 'lower tops, lower bottoms' is now 6 months old. The 'golden cross' of the 50 day EMA above the 200 day EMA, which will technically confirm a return to a bull market, is still awaited. 

On longer term weekly chart (not shown), oil's price closed above its 20 week and 50 week EMAs but well below its falling 200 week EMA in a long-term bear market. Weekly MACD and RSI are in neutral zones. Slow stochastic is facing resistance from its overbought zone.

Gold and Silver charts: pullback rallies facing resistances

Gold chart pattern

The following remarks appeared in the previous post on the daily bar chart pattern of Gold: "The 'death cross' of the 50 day EMA below the 200 day EMA will technically confirm a return to a bear market. Bulls may try their best to prevent that."

Gold's price touched an intra-day low of 1204 on Jul 10, but bounced up to close higher - forming a 'reversal day' bar (lower low, higher close). That triggered a pullback rally which is facing resistance from the 20 day EMA.

Note that bulls managed to prevent the 'death cross' of the 50 day EMA below the 200 day EMA. At least for now. May not be for long.

Daily technical indicators have corrected oversold conditions, and are showing upward momentum inside bearish zones. The pullback rally may continue a bit further, but expect resistance from the converging 50 day and 200 day EMAs. 

Gold's price is trading below its 50 day and 200 day EMAs in a bear market. The fact that the price dropped below May 9 'valley' low of 1214 keeps the 'double top' reversal pattern in force (refer previous post), and the possibility of a deeper fall towards the Dec '16 low of 1130.

On longer term weekly chart (not shown), gold’s price closed below its three weekly EMAs in long-term bear territory. Weekly technical indicators are in bearish zones, and not showing any upward momentum.

Silver chart pattern

The following remarks were made in the previous post on the daily bar chart pattern of Silver: "Expect bears to sell on every rise. A test of the Dec '16 low is a possibility."

Silver's price dropped below its Dec '16 low to touch an intra-day low of 15.145 on Jul 10, but bounced up to close higher - forming a 'reversal day' bar (lower low, higher close). 

The subsequent pullback rally is facing resistance from the May 9 low. Bears can be expected to sell at any time.

Daily technical indicators have corrected oversold conditions and showing some upward momentum. Only Slow stochastic has entered bullish zone (above its 50% level). MACD and RSI are still in bearish zones.

On longer term weekly chart (not shown), silver’s price closed well below its three falling weekly EMAs in a long-term bear market. Weekly technical indicators are in bearish zones and showing a bit of upward momentum.

WTI and Brent Crude Oil charts: bears stay on top

WTI Crude Oil chart

The following comments were made in the previous post on the daily bar chart pattern of WTI Crude Oil: "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."

Oversold technical indicators triggered a sharp counter-trend rally that propelled oil's price above its 20 day and 50 day EMAs.

After touching a much lower top of 47.32 on Jul 5, oil's price formed a large 'reversal day' bar (higher high, lower close) with a spurt in volumes that signalled the end of the rally.

All three EMAs have resumed their downward journey. Oil's price is trading below them in a bear market.

Daily technical indicators are turning bearish and hinting at some more correction or consolidation.

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

Brent Crude Oil chart

Oversold technical indicators led to a short-covering rally on the daily bar chart pattern of Brent Crude Oil. 

A brief foray above the 50 day EMA on Jul 3 was followed by a test of resistance from the 50 level on the following day.

The formation of a large 'reversal day' bar (higher high, lower close) with a volume surge marked an intermediate top and an end of the rally.

Oil's price is trading below its three falling EMAs in a bear market.

Daily technical indicators are looking bearish and hinting at some more correction or consolidation.

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.

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.

WTI and Brent Crude Oil charts: bears clearly on top

WTI Crude Oil chart

The following remarks appeared in the previous post on the daily bar chart pattern of WTI Crude Oil: "Since the beginning of the year, oil's price has formed a bearish pattern of 'lower tops, lower bottoms'. Till that pattern gets reversed, expect bears to sell on every rise."

Bears took charge and pushed oil's price down to 45. Bulls may feel relieved that the May low of 43.75 was not breached. Bears will point out that the 50 day EMA has crossed below the 200 day EMA - the 'death cross' that technically confirms a return to a bear market.

Daily technical indicators are looking oversold and triggered a technical bounce on Monday (Jun 12). The bounce was aided by inventory declines in US and news that Saudi Arabia will limit supplies to some Asian buyers and deepen supply cuts to USA.

Strong volumes on recent down days show that bears are in no mood to relinquish control.

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 and showing downward momentum.

Brent Crude Oil chart

The daily bar chart pattern of Brent Crude Oil shows bears are very much on top. Oil's price dropped to 47.50 before bouncing up a bit. 

The imminent 'death cross' of the 50 day EMA below the 200 day EMA will technically confirm a return to a bear market.

A fall below the May '17 low of 46.50 will keep the bearish pattern of 'lower tops, lower bottoms' intact.

Oversold technical indicators may encourage bulls to turn Monday's (Jun 12) technical bounce into a pullback rally. Note that Slow stochastic is showing negative divergence by falling lower.

Expect bears to keep selling on every rise.

On longer term weekly chart (not shown), oil's price closed below its three weekly EMAs in a long-term bear market. Strong volumes on recent down weeks may lead to a re-test of the Jan '16 low. Weekly technical indicators are looking bearish.

WTI and Brent Crude Oil charts: bears strike as OPEC-led production cut fails to reduce supply glut

WTI Crude Oil chart

The following remark was made in the previous post on the daily bar chart pattern of WTI Crude Oil: "A fall below 52 can take oil's price down below its 20 day and 50 day EMAs to the next support level of 50."

A sharp fall below 52 on Apr 19 dropped oil's price below its 20 day and 50 day EMAs. The 50 level failed to provide any support, as oil's price plunged below its 200 day EMA into bear territory.

Daily technical indicators are in bearish zones. MACD is showing downward momentum. RSI is moving sideways. Slow stochastic is inside its oversold zone, and can trigger a pullback towards 50. Bears may use any rise to sell.

Rising crude production in Libya and USA has countered OPEC-led production cuts aimed at clearing a supply glut.

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

Brent Crude Oil chart

The daily bar chart pattern of Brent Crude Oil dropped sharply below its 20 day and 50 day EMAs on Apr 19. After receiving token support from the 53 level, oil's price dropped further to seek support from its 200 day EMA.

On Apr 27, oil's price dropped below its 200 day EMA, but bounced up after receiving support from the 51 level. Bullish hopes suffered a jolt when oil's price slipped down to close below its 200 day EMA in bear territory on May 1.

Daily technical indicators are in bearish zones, hinting at some more correction. Expect bears to sell on any pullback effort by bulls.

On longer term weekly chart (not shown), oil's price has closed below its three weekly EMAs in a long-term bear market. Weekly MACD is still in bullish zone. RSI  is in bearish zone and Slow stochastic is inside its oversold zone. All three technical indicators are showing downward momentum.

WTI and Brent Crude Oil charts: break down sharply below consolidation patterns

WTI Crude Oil chart

The following comments were made in the previous post on the daily closing chart pattern of WTI Crude Oil: "Oil's price is likely to correct downwards from the 'wedge'. Stronger volumes on recent down days are indicating that bears are sensing an opportunity to attack."

Daily technical indicators, which were looking bearish and showing negative divergences, had also signalled a correction. 

Oil's price broke down below the 'rising wedge' pattern and plummeted below its 200 day EMA in the space of three trading sessions - wiping out all gains made in the previous three months. 

After a brief pullback above the 200 day EMA, oil's price has once again dropped into bear territory below its three EMAs.

Daily technical indicators have corrected oversold conditions, but remain in bearish zones and are not showing any upward momentum. 

Bears have regained control of the chart. Expect some support at 47.

On longer term weekly chart (not shown), oil's price has dropped below its 20 week EMA and is seeking support from its 50 week EMA. It closed well below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are looking bearish, and showing downward momentum.

Brent Crude Oil chart

The daily closing chart pattern of Brent Crude Oil broke down sharply below the 'symmetrical triangle' pattern within which it was consolidating for the previous 10 weeks.

All gains made in the previous three months were erased in three trading sessions. Oil's price has bounced up after finding good support from its 200 day EMA.

The respite from a strong bear attack may be short-lived for bulls. Daily technical indicators are close to their respective oversold zones and showing downward momentum.

Some more correction - towards 49 - is likely.

On longer term weekly chart (not shown), oil's price has dropped below its 20 week EMA and is seeking support from its 50 week EMA. It closed well below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are looking bearish, and showing downward momentum.

Is Selling Short riskier than Going Long?

'Selling Short' is a strategy when you are feeling bearish. You expect that the stock market as a whole, or a specific stock you may or may not hold, will be falling lower. So, you decide to sell first - and try to buy later at a lower price.

Shorting usually means selling some thing that you do not already own. You obviously can't own the index. But you can buy/sell an index in the F&O segment or buy/sell an index ETF.

How can you 'short sell' a stock that you don't own? By borrowing the stock - either from a friend, or from your broker. You may need to pay a 'margin' amount for doing this.

'Going long' is the opposite of 'selling short'. You are feeling bullish, and expect the stock market or a specific stock will be rising higher. So, you decide to buy first with the expectation of selling at a higher price in future.

Most small investors take the 'going long' route. It is an easier concept to understand and implement. But it works best when a stock or an index is in a bull market.

A stock or an index doesn't move up in a straight line. There are periods when there is an up move, followed by periods of correction. Such corrections provide opportunities for adding more. The tactic is called 'buying the dip'.

'Selling short' works best when a stock or index is in a bear market. Every fall in a stock or index is followed by periods of correction when there is a price rise. Such corrections provide opportunities for selling more. The tactic is called 'sell on rise'.

Now that you know all about 'selling short' and 'going long', which strategy should you follow? It should depend on the strategy with less risk. So, which is the less riskier strategy? This can be explained with examples.

Let us say you buy a stock at Rs 50. The price rises to Rs 70 and then corrects to Rs 60. You 'buy the dip'. The price rises to Rs 90 and then corrects to Rs 80. You 'buy the dip' again. This time the stock price touches Rs 100 and you decide to book profit.

But making money in the stock market is never that easy. What if the stocks price drops to Rs 40 after you bought it at Rs 50. Will you 'buy the dip' by 'averaging down' or sell the stock at a loss? 

Many small investors lose a lot of money when they 'average down' by buying a stock as it falls. Theoretically, the stock's price can fall to zero, and you can lose your entire investment.

A better strategy when a stock or an index is falling is to 'sell short'. But there is a problem here. What if you ' short sell' the stock at Rs 50, expecting it to go down, but it rises to Rs 60? Your friend or broker - who loaned the stock to you - may want the stock back.

You have two choices. Buy back the stock at Rs 60 and bear the loss of Rs 10 per stock. Or, you can keep your short position 'open' by paying an interest (called 'margin') and hoping that the price will eventually fall.

But the price keeps on rising, till you are forced to buy back at a much higher price and sustain a considerable loss. Theoretically, the stock price can rise to infinity, which means your loss can be infinite.

That may not happen in real life, but it isn't impossible for a Rs 50 stock to rise to Rs 500 (a 'ten bagger'). By 'going long' on a Rs 50 stock, you can lose Rs 50 at most (unless you 'average down' - in which case you can lose a lot more). By 'selling short' a Rs 50 stock, you can lose Rs 450 if the stock rises to Rs 500!

By applying a proper stop-loss to what you buy or sell, you can limit how much you can lose on a particular transaction. However, the fact remains that 'selling short' involves a greater risk than 'going long'.

(In a bear market, a less risky strategy is to 'short' a stock you already own. That means no borrowing and no paying of 'margin' money. Say, you decide to sell Tata Motors at Rs 500 - hoping to buy it back at a lower price. But the price moves up to Rs 550. You don't lose any money because you already owned the stock. But you do lose the opportunity of making an extra Rs 50.)

Read this article in investopedia.com to learn more.

Gold and Silver charts: technical bounces face resistances

Gold chart pattern

The following comments were made in the previous post on the daily bar chart pattern of Gold: "Daily technical indicators have been in oversold zones for more than a month, and showing positive divergences by not falling lower with gold's price. Don't expect a trend reversal any time soon, as bears are selling on every rise."

Gold's price found some support at 1130, followed by a technical bounce that took gold's price just above its 20 day EMA on Dec 29. 

However, after moving briefly above the 1160 level on the last trading day of the year, gold's price formed a 'reversal day' bar (higher high, lower close) that often marks an intermediate top.

Daily technical indicators are giving mixed signals. MACD is rising above its signal line, but remains in negative zone. Slow stochastic has climbed above its 50% level. RSI failed to reach its 50% level and has turned down.

With the US Dollar remaining strong, bears are likely to ensure that gold's price stays subdued. 

On longer term weekly chart (not shown), all three weekly EMAs are falling, and gold’s price has closed well below them in a long-term bear market. Weekly technical indicators are looking bearish and oversold. 

Silver chart pattern

The daily bar chart pattern of Silver bounced up after receiving support from the 15.75 level, but faced strong resistance from its falling 20 day EMA.

On Dec 30, a 'reversal day' bar (higher high, lower close) put paid to any bullish hopes.

Daily technical indicators are in bearish zones and not showing any upward momentum. Lower levels are likely.

On longer term weekly chart (not shown), silver’s price closed well below its three weekly EMAs in a long-term bear market. Weekly technical indicators are looking bearish and oversold.

WTI and Brent Crude Oil charts: correct sharply below large rising wedge patterns

WTI Crude Oil chart

The following comment appeared in the previous post on the daily bar chart pattern of WTI Crude Oil: "The entire rally since the Aug '16 low may be forming a large 'rising wedge' pattern from which the likely breakout is downwards."

Four days after the previous post, oil's price closed below its 20 day EMA and the support level of 49. That triggered a sharp correction below the 50 day EMA, the lower edge of a large 'rising wedge' pattern and the 200 day EMA - back into bear territory.

All three daily technical indicators are looking oversold. A pullback towards the 200 day EMA and the lower edge of the 'rising wedge' may have started. Bears will probably use the opportunity to sell again.

Speculative buying on hopes of a production freeze by OPEC nations had caused the price rally during Sep-Oct '16. Those hopes have begun to fade as the long feud between Iran and Saudi Arabia is rearing its ugly head again.

On longer term weekly chart (not shown), oil's price has closed below its entangled 20 week and 50 week EMAs, and well below its sliding 200 week EMA in a long-term bear market. Weekly technical indicators are looking bearish and showing downward momentum.

Brent Crude Oil chart

The following comment appeared in the previous post on the daily bar chart pattern of Brent Crude Oil: "There is a possibility that the downward channel may turn out to be a 'flag' or a 'falling wedge' - both of which have bullish implications." 

What had looked like a small 'flag' turned out to be the early stage of a sharp correction below a large 'rising wedge' pattern, which dropped oil's price below its three EMAs into bear territory.

Daily technical indicators are looking oversold, but showing some signs of a recovery. A pullback towards the 200 day EMA and the lower edge of the 'rising wedge' is likely.

On longer term weekly chart (not shown), oil's price has closed below its entangled 20 week and 50 week EMAs, and well below its sliding 200 week EMA in a long-term bear market. Weekly technical indicators have turned bearish and showing downward momentum.

WTI and Brent Crude Oil charts: slip back into bear territories

WTI Crude Oil chart

The following remarks were made in the previous post on the daily bar chart pattern of WTI Crude Oil: "Daily technical indicators are in bearish zones and showing downward momentum - suggesting a possible break below the 200 day EMA towards the zone between 40-42."

Note that oil's price traded below its 20 day and 50 day EMAs for 10 trading sessions in a row, receiving good support from its 200 day EMA before finally breaking down and closing at 43.

All three daily technical indicators are in bearish zones and showing downward momentum - hinting at some more correction. Slow stochastic is inside its oversold zone, and showing positive divergence by not falling lower with oil's price.

A pullback towards the 200 day EMA is likely. Bears may use the opportunity to sell again.

On longer term weekly chart (not shown), oil's price dropped below its 20 week and 50 week EMAs after forming a small 'rounding top' reversal pattern. It is trading well below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are looking bearish and showing downward momentum.

Brent Crude Oil chart

The daily bar chart pattern of Brent Crude Oil made a valiant effort to return to bull territory, but failed to overcome strong resistance from its falling 20 day EMA.

Oil's price has breached its 200 day EMA once again, and closed below the 45 level. Daily technical indicators are looking bearish and showing downward momentum.

More correction is on the cards. Slow stochastic is showing positive divergence by not falling lower with oil's price. That can lead to a pullback to the 200 day EMA.

On longer term weekly chart (not shown), oil's price has dropped below its 20 week and 50 week EMAs. It continues to trade well below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are looking bearish and showing downward momentum.

WTI and Brent Crude Oil charts: bulls reluctantly yield ground as bears dominate

WTI Crude Oil chart

The following comment appeared in the previous post on the daily bar chart pattern of WTI Crude Oil: "All three daily technical indicators are looking bearish and showing downward momentum - hinting at some more correction."

Oil's price moved above its three EMAs into bull territory - immediately after the previous post - but touched a lower top and corrected down to seek support from its rising 200 day EMA.

Daily technical indicators are in bearish zones and showing downward momentum - suggesting a possible break below the 200 day EMA towards the zone between 40-42.

On Mon. Jul 11, oil's price closed at a 2 months low. Production by OPEC countries reached an 8 years high, causing a supply glut.

On longer term weekly chart (not shown), oil's price formed a small 'rounding top' bearish pattern and slipped below its 50 week EMA. It continues to trade well below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are showing downward momentum after correcting overbought conditions.

Brent Crude Oil chart

In the previous post, bearish technical indicators had hinted at a continuation of the corrective move on the daily bar chart pattern of Brent Crude Oil.

After bouncing up above its three EMAs into bull territory in end-Jun '16, oil's price resumed its correction and has closed just below its 200 day EMA in bear territory.

Is the 4 months long rally from the Jan '16 low over? Bearish 'rounding top' patterns being formed by the 20 day and 50 day EMAs are suggesting a correction towards the zone between 40-42.

Daily technical indicators are in bearish zones and showing downward momentum. However, Slow stochastic is looking quite oversold, and can trigger a brief recovery in price.

On longer term weekly chart (not shown), oil's price dropped below its 50 week EMA and is seeking support from its 20 week EMA. It is trading well below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are in bullish zones after correcting overbought conditions, but showing downward momentum.

WTI and Brent Crude Oil charts: will bear market rallies falter again?

WTI Crude Oil chart

The following comments appeared in the previous post on the daily bar chart pattern of WTI Crude oil: "Oil's price can correct some more. Bulls may use the dip to mount another attempt at crossing the 200 day EMA."

Oil's price corrected deeper into bear territory below its 20 day and 50 day EMAs. Bulls used the dip to make another attempt to cross above its 200 day EMA - but haven't been successful so far.

Even if oil's price crosses above its 200 day EMA, the strong resistance zone between 42-44 will be more difficult to overcome.

So, what caused the renewed price spurt? Was it hopes that the oil producer's meeting at Doha this weekend will tackle the supply glut? Or, was it due to a weaker US Dollar (which is negatively correlated with oil's price)? Or, signs of greater off-take from China? 

All of the above - as per this article from Reuters.

Daily technical indicators are in bullish zones, and showing good upward momentum. But yesterday's (Apr 11) volume bar is a sign that bulls may be running out of steam.

On longer term weekly chart (not shown), oil’s price closed above its rising 20 week EMA, but is trading below its falling 50 week and 200 week EMAs in a long-term bear market. Weekly MACD is rising in negative zone. RSI has crossed above its 50% level. Slow stochastic looks ready to re-enter its overbought zone. 

Brent Crude Oil chart

The daily bar chart pattern of Brent Crude oil shows a renewed attempt by bulls to overcome a strong bear stranglehold. After falling below its 20 day and 50 day EMAs, oil's price rose sharply to touch 43 - its highest level during the year.

Oil's price has so far failed to test resistance from its sliding 200 day EMA - but may do so if oil producers agree to cut production. Unlikely, since Iran and Saudi Arabia are at loggerheads.

All three daily technical indicators - despite their upward momentum - are showing negative divergences by failing to touch new highs with oil's price.

Bears may attack with their 'sell on rise' strategy at any time.

On longer term weekly chart (not shown), oil's price closed above its 20 week 
EMA, but is trading below its falling 50 week and 200 week EMAs. Weekly MACD is rising in negative zone. RSI has crept above its 50% level. Slow stochastic is inside its overbought zone. There is very little chance of the long-term bear market ending in the near future.