WTI Crude Oil chart
Note the following comment from the previous post on the daily bar chart pattern of WTI Crude Oil: "Some consolidation is likely before oil's price can attempt to move higher."
Resistance from the 58 level was tested intra-day on Mar 1, but oil's price formed a 'reversal day' bar (higher high, lower close) that triggered a sideways consolidation with a slight downward bias.
The 50 day EMA provided support. Oil's price closed above its 20 day and 50 day EMAs, but below its 200 day EMA in bear territory. Output cuts led by OPEC and good demand may enable oil's price to move above its 200 day EMA into bull territory.
Daily technical indicators are in bullish zones but not showing much upward momentum. MACD is moving sideways below its signal line in bullish zone. RSI is treading water above its 50% level. Slow stochastic has fallen from its overbought zone. Some more consolidation is possible.
On longer term weekly chart (not shown), oil's price closed above its 20 week EMA but below its 50 week and 200 week EMAs in a long-term bear market. Weekly technical indicators are looking neutral to bullish. MACD is rising above its signal line in bearish zone. RSI is facing resistance from its 50% level. Slow stochastic is inside its overbought zone.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude Oil continued its expected sideways consolidation. Oil's price twice tested resistance from the sliding 200 day EMA (on Mar 1 and Mar 7), dropped to seek support from its rising 50 day EMA and closed just below its 200 day EMA in bear territory.
Strong volumes on down days (Mar 1 and Mar 8) show that bears are not going to give up ground easily.
Daily technical indicators are in bullish zones but not showing much upward momentum. MACD is sliding down below its signal line in bullish zone. RSI is moving sideways above its 50% level. Slow stochastic has fallen from its overbought zone. Some more consolidation is possible before oil's price can move above its 200 day EMA into bull territory.
On longer term weekly chart (not shown), oil's price closed above its 20 week and 200 week EMAs in long-term bull territory, but faced resistance from its 50 week EMA. Weekly technical indicators are looking bullish to neutral.
WTI Crude Oil chart
The daily bar chart pattern of WTI Crude Oil had slipped below the 50 level intra-day on Nov 29 & 30, but managed to close above 50 on both days. On Dec 6, oil's price successfully tested support from the 50 level.
Announcement of a 1.2 million barrels/day production cut by OPEC and non-OPEC oil producers from Jan '19 appears to have put a floor on oil's price at 50. However, three attempts to rally above 54 faced strong resistance from the falling 20 day EMA.
'Death cross' of the 50 day EMA below the 200 day EMA (marked by gray circle) has technically confirmed a bear market. Expect bears to remain in control despite the OPEC production cut because of demand slow down.
Daily technical indicators are in bearish zones after correcting oversold conditions. MACD has crossed above its signal line inside its oversold zone. RSI and Slow stochastic have emerged from their respective oversold zones, but are not showing any upward momentum.
On longer term weekly chart (not shown), oil's price closed well below its three weekly EMAs in long-term bear territory. Weekly technical indicators are looking oversold. MACD is falling below its signal line in oversold zone. RSI is seeking support from the edge of its oversold zone. Slow stochastic is moving sideways well inside its oversold zone.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude Oil touched an intra-day 52 week low of 57.50 on Nov 29 but bounced up to close at 59.50. It has since found a floor at 58 after a sharp 30 points fall from its Oct '18 top.
'Death cross' of the 50 day EMA below the 200 day EMA (marked by gray circle) has technically confirmed a bear market. An attempt by oil's price to rally above 63 met with strong resistance from the falling 20 day EMA. Some consolidation around current levels is likely.
Daily technical indicators have corrected oversold conditions, but remain in bearish zones. MACD has crossed above its signal line inside its oversold zone. RSI and Slow stochastic have emerged from their respective oversold zones, but are not showing any upward momentum.
On longer term weekly chart (not shown), oil's price closed well below its three weekly EMAs in long-term bear territory. Weekly technical indicators are looking bearish and oversold. MACD is falling below its signal line and has dropped inside its oversold zone. RSI has emerged from its oversold zone, but not showing any upward momentum. Slow stochastic is moving sideways inside its oversold zone.
FIIs were net buyers of equity on Mon. & Thu. (Dec 3 & 6), but net sellers on the other three days of the week. Their total net selling was worth Rs 8.7 Billion. DIIs were net buyers of equity on Fri. (Dec 7), but net sellers on the other four days. Their total net selling was worth Rs 22.7 Billion, as per provisional figures.
India's Current Account Deficit (CAD) widened to US $19.1 Billion (2.9% of GDP) during Q2 (Sep '18) compared to US $6.9 Billion (1.1% of GDP) during Q2 (Sep '17) - mainly due to a large trade deficit. CAD was US $15.9 Billion (2.4% of GDP) during Q1 (Jun '18).
Members of OPEC pledged to reduce their production by 800,000 barrels per day for 6 months beginning Jan '19. Russia and other non-OPEC producers have promised to slash production by 400,000 barrels per day. OPEC members Iran, Venezuela and Libya have been granted exemption from the production cuts.
BSE Sensex index chart pattern
The following remark was made in last week's post on the daily bar chart pattern of Sensex: "Note that RSI and Slow stochastic are showing negative divergences by touching lower tops, and can trigger a pullback below the 'gap' towards the 200 day EMA."
The index touched an intra-day high of 36446 on Mon. Dec 3, only to close 200 points lower. That triggered the expected pullback below the downward 'gap' (formed on Oct 4).
On Thu. Dec 6, the index breached the uptrend line (connecting Oct 26 and Nov 26 lows) and dropped to seek support from its 200 day EMA. Friday's pullback found resistance from the uptrend line.
Sensex managed to close above its three EMAs in bull territory, but lost more than 500 points (~1.4%) on a weekly closing basis. Bears will most likely use Friday's pullback to sell.
Daily technical indicators are looking bullish to neutral. MACD is receiving support from its signal line in bullish zone. ROC has crossed above its 10 day MA in bullish zone. RSI is seeking support from its 50% level. Slow stochastic has slipped below its 50% level.
RSI and Slow stochastic formed bearish 'double top' reversal patterns inside their respective overbought zones. The support zone between 33934 and 32372 is back in the picture again.
Oil prices are likely to rise, with consequent pressure on the Rupee. That will widen the CAD even further. State election results on Dec 11 is keeping the market on edge. FIIs have turned net sellers of equity. Bears have used the opportunity to wrest the initiative from bulls after a 5 weeks long counter-trend rally.
NSE Nifty index chart pattern
The possibility of a corrective move was mentioned in last week's post on the weekly bar chart pattern of Nifty. The index touched an intra-week high of 10941, but dropped below its 20 week EMA - forming a 'reversal' bar and closing more than 180 points (~1.7%) lower for the week.
A likely fall below the 50 week EMA will bring the support zone between 10283 and 9827 back into the picture.
The 50% Fibonacci retracement level (10882) of the fall from the Aug '18 top to the Oct '18 low acted as a resistance for the 5 weeks long counter-trend rally - as Nifty failed to close above 10882.
Weekly technical indicators are in bearish zones, but not showing any upward momentum. MACD is moving sideways below its falling signal line. ROC is moving sideways after crossing above its falling 10 week MA. RSI and Slow stochastic are moving sideways.
Nifty's TTM P/E has moved down to 25.87, which remains well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is inside its oversold zone. Some index consolidation or correction is possible.
Nifty is trading well above its 200 week EMA in a long-term bull market. A deeper correction will provide a very good buying opportunity.
Bottomline? FII buying had started counter-trend rallies on Sensex and Nifty charts from their Oct '18 lows. The rallies have run their course, and the down trends appear to have resumed. Possibility of opposition wins in a couple of state elections is keeping the market unsettled. Wait for the market to 'digest' election results - to be announced on Dec 11. Better entry points should become available.
WTI Crude Oil chart
The daily bar chart pattern of WTI Crude Oil received twin support from its 20 day and 50 day EMAs and rose to touch a 52 week high of 75.91 on Oct 2, but formed a small 'reversal day' bar (higher high, lower close).
All three EMAs are rising, and oil's price is trading above them in a bull market. Trump's exhortation to OPEC to hike production and put a lid on oil's price appears to have fallen on deaf ears.
Daily technical indicators are looking quite overbought, and can trigger a correction. Note the 'double bottom' reversal pattern on Slow stochastic that preceded the recent rally.
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 looking bullish and showing upward momentum.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude Oil received good support from its 20 day EMA and soared to a 52 week high of 85.45 on Oct 1, before closing a bit lower.
All three EMAs are rising, and oil's price closed above them in a bull market. The almost vertical rally during the past two weeks is unsustainable. A correction may follow.
Daily technical indicators are inside their respective overbought zones. A pullback towards 80 is a possibility.
On longer term weekly chart (not shown), oil's price closed above its three rising weekly EMAs in long-term bull territory. Weekly technical indicators are looking bullish and overbought - hinting at a pullback.
WTI Crude Oil chart
The following comments were made in the previous post on the daily bar chart pattern of WTI Crude Oil: "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."
Oil's price formed a 'diamond' reversal pattern that tends to mark a price top - from which a sharp downward breakout occurred on Wed. Jul 11. After a brief upward bounce from the 50 day EMA, oil's price had another sharp fall towards the 'support-resistance zone' (between 66 and 67).
Daily technical indicators have corrected overbought conditions, and are showing downward momentum. MACD is falling below its signal line in bullish zone. RSI and Slow stochastic are falling below their respective 50% levels.
The rising 200 day EMA suggests that the bull market is alive. However, some more correction is likely.
Evidence is mounting that Saudi Arabia is heeding US President Donald Trump's call for OPEC to keep the oil market amply supplied and rein in prices.
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, and are showing downward momentum in bullish zones. Some more correction is possible.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude Oil had formed a small 'double top' reversal pattern in May '18, followed by a correction within a 'flag' pattern. An upward breakout from the 'flag' in Jun '18 was followed by the formation of a second 'double top' reversal pattern.
A sharp downward breakout occurred from the second 'double top' on Wed. Jul 11, which dropped oil's price to the 73 level. A brief upward bounce faced resistance from the 50 day EMA.
Another sharp fall towards the 'support-resistance zone' (between 70 and 71.30) on Mon. Jul 16 has put bulls on the back foot. However, oil's price continues to trade above its rising 200 day EMA in a bull market.
Daily technical indicators are in bearish zones, and showing downward momentum. Slow stochastic is seeking support from the edge of its oversold zone, and can trigger a technical bounce.
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 in long-term bull territory. Weekly technical indicators are turning bearish. MACD is falling below its signal line in bullish zone. RSI and Slow stochastic are seeking support from their respective 50% levels.
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.
FIIs were net sellers of equity worth Rs 47.4 Billion during the week, though they were net buyers on Thu. Jun 21. DIIs were net buyers of equity worth Rs 47.2 Billion, as per provisional figures. Sensex and Nifty gained marginally on a weekly closing basis.
Out of 21 PSU banks, only 2 - Indian Bank and Vijaya Bank - were able to pay dividends worth Rs 4.44 Billion to the government. This was the worst dividend payout by PSU banks in the past 10 years.
The government is considering a proposal to sell a significant proportion of its stake in IDBI Bank to LIC, and has approached IRDAI for clearance (as LIC already holds more than 10% stake in IDBI and can't hold more than 15% in a single company).
BSE Sensex index chart pattern
The following comments were made in last week's post on the daily bar chart pattern of Sensex: "The 20 day EMA is merging with the lower edge of the 'rising wedge'. That ought to help bulls put up a fight to prevent a likely fall below the 'wedge'."
The index did fall below the 'rising wedge' on Tue. Jun 19 but received support from its 20 day EMA. For the rest of the week, the index continued to receive support from the 20 day EMA but faced resistance from the lower edge of the 'wedge'.
The down trend line is also providing resistance to the index - as it has done for almost 5 months. Sensex closed above its three rising EMAs in bull territory, but needs to move convincingly above the down trend line to attain new highs.
Daily technical indicators are in bullish zones, but not showing much upward momentum. MACD is entangled with its signal line and moving sideways. ROC bounced up from its '0' line but remains below its 10 day MA. RSI and Slow stochastic are rising towards their respective overbought zones.
Despite OPEC's decision to increase output on Fri. Jun 22, oil prices shot up as the announced increase was less than expectations. Progress of the monsoon across India has been slow. These are worrying signs that inflation may continue to rise.
Bull markets are supposed to take all worries in stride. However, caution is advised. As long as bears are able to defend the down trend line, the possibility of a fall towards (and even below) the 132 points 'gap' can't be ruled out.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty dropped to seek support from the 33 points downward 'gap', but bounced up to close with a weekly gain for the 5th week in a row.
The down trend line again provided strong resistance. Nifty's weekly bar formed a bearish 'hanging man' candlestick pattern. Volume bars are showing negative divergence by touching lower tops.
Weekly technical indicators are in bullish zones. MACD has started to rise above its signal line. RSI is facing resistance from the edge of its overbought zone. Slow stochastic has entered its overbought zone.
However, ROC is about to cross below its rising 10 week MA, and has slipped down from its overbought zone. Some correction or consolidation is likely.
Nifty's TTM P/E has slipped down to 26.63 - still well above its long-term average. The breadth indicator NSE TRIN (not shown) is oscillating in neutral zone, hinting at some consolidation around current levels.
Bottomline? Bears strongly defended down trend lines on Sensex and Nifty charts. Bulls are pushing them to the limit of their resistance. Some more consolidation or correction can be expected in F&O expiry week. Stay on the sidelines till clear trends emerge. Long term trends remain up.
FIIs were net sellers of equity on all three trading days this week. Their total net selling was worth a huge Rs 45.2 Billion. DIIs were net buyers on all three trading days. Their total net buying was worth Rs 29.5 Billion, as per provisional figures.
Domestic air passenger traffic grew 16.53% to 11.86 million in May '18 as compared to 10.17 million in May '17, according to data released by DGCA.
Overseas funds are pulling out of six major Asian emerging equity markets at a pace unseen since the global financial crisis of 2008 — withdrawing US $19 Billion from India, Indonesia, Philippines, South Korea, Taiwan and Thailand so far this year, according to Bloomberg.
The daily bar chart pattern of Nifty shows that bears are putting up strong resistance by defending the down trend line. Following last Wednesday's intra-day breach, the index dropped to seek support from the 'gap' formed on Feb 5.
The index bounced up today and closed above its three EMAs in bull territory. A convincing move above the down trend line is necessary for bulls to regain control of the chart.
Daily technical indicators are in bullish zones, but not showing any upward momentum. A fall below the 50 day EMA can lead to a test of support from the 200 day EMA.
Nifty's TTM P/E has slipped a bit to 26.52 - which is still much higher than its long-term average. The breadth indicator NSE TRIN (not shown) is showing downward momentum in neutral zone, and can trigger some near-term index up side.
FIIs continue to sell heavily. The Rupee is weakening against the US Dollar. The OPEC meeting on Jun 22 will decide the near-term trend in oil's price. Trump's trade war with China can upset global economic growth trajectory.
All of the above may increase volatility in the stock market. So, remain cautious. The rising 200 day EMA is an indication of a bull market. No need for any panic selling or impulsive buying.
WTI Crude Oil chart
On Nov 21, the daily bar chart pattern of WTI Crude Oil broke out above the 'symmetrical triangle' pattern within which it was consolidating since the beginning of Nov '17 (refer previous post).
Oil's price rose with good volume support to touch a new high of 59 on Nov 24, but all three daily technical indicators touched lower tops. The negative divergences triggered a pullback towards the top of the 'triangle'.
After touching an intra-day low of 56.75 on Nov 29, oil's price recovered to touch a slightly lower top of 58.90 on Dec 1. The entire trading from Nov 21 onwards appears to be forming another 'symmetrical triangle' pattern.
All three EMAs are rising, and oil's price is trading above them in a bull market. Daily technical indicators are in bullish zones after correcting overbought conditions, but are not showing any upward momentum.
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.
On longer term weekly chart (not shown), oil's price made a brief foray above its sliding 200 week EMA, but has slipped down to close just below it. The 20 week and 50 week EMAs are rising towards the 200 week EMA. Weekly MACD and Slow stochastic are in their overbought zones. RSI has started correcting down from its overbought zone.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude Oil has been consolidating sideways within a 'symmetrical triangle' pattern since the beginning of Nov '17. The rising 20 day EMA has provided good downside support.
On Dec 1, oil's price had an intra-day breakout above the 'triangle' - touching a high of 64.30 - but faced profit booking and closed at the upper edge of the 'triangle'. It has since corrected to the lower edge of the 'triangle'.
On Nov 30, OPEC, and some non-OPEC, oil producers agreed to extend their production cuts till the end of 2018. Bull enthusiasm was short-lived because drillers in USA added two oil rigs - bringing the total count to 749 (highest since September).
Daily technical indicators are in bullish zones, but showing downward momentum and hinting at a possible downward breakout from the 'triangle'. Wait for the breakout before deciding to buy or sell because a 'triangle' pattern is unreliable.
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 MACD and Slow stochastic are inside their overbought zones. RSI formed a small 'double top' reversal pattern inside its overbought zone, and has started to correct.
WTI Crude Oil chart
The following remarks appeared in the previous post on the daily bar chart pattern of WTI Crude Oil: "Daily technical indicators are looking quite overbought. Slow stochastic is showing negative divergence by failing to touch a new high with oil's price. A pullback towards 55 is a possibility."
Oil's price rose to touch a new intra-day high of 57.92 on Nov 8, but formed a 'reversal day' bar (higher high, lower close) that triggered a correction to an intra-day low of 54.81 on Nov 14.
Good support from the 20 day EMA prevented a deeper correction. Oil's price rose to touch a lower top of 56.77 on Nov 20 and formed another 'reversal day' bar (higher high, lower close).
Another test of support from the 20 day EMA is a possibility. If the support breaks, oil's price can drop to the zone between 52 & 53.
The entire trading during Nov '17 has formed a 'symmetrical triangle' pattern from which a breakout can occur upwards or downwards. Daily technical indicators are in bullish zones after correcting overbought conditions, but are not showing much upward momentum.
Increase in US crude oil production due to recent higher oil prices has become a matter of concern for OPEC and non-OPEC producers, who will be meeting on Nov 30 to discuss their production restriction deal that is going to expire in Mar '18.
On longer term weekly chart (not shown), oil's price slipped down after facing resistance from its sliding 200 week EMA, but closed well above its 20 week and 50 week EMAs. Weekly technical indicators are in bullish zones, but showing signs of correcting down.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude Oil touched an intra-day high of 64.65 on Nov 7, but formed a 'reversal day' bar (higher high, lower close) that triggered a correction to the zone between 61 & 62. (The possibility was mentioned in the previous post.)
After receiving good support from its 20 day EMA, oil's price bounced up to touch a lower top of 62.92 on Fri. Nov 17 - only to slip down and close just above 62 on Nov 20.
The entire trading during Nov '17 has formed a 'symmetrical triangle' pattern from which a breakout can occur upwards or downwards. The fact that oil's price failed to test resistance from the upper edge of the 'triangle' has increased the chances of a downward breakout.
Daily technical indicators have corrected overbought conditions, and are showing slight downward momentum. A downward breakout from the 'triangle' can drop oil's price to the zone between 58 & 59.
On longer term weekly chart (not shown), oil's price slipped down below its 200 week EMA but managed to close above it. Weekly technical indicators are correcting overbought conditions. Slow stochastic has formed a 'double top' reversal pattern inside overbought zone, and can trigger a correction.
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 Crude Oil chart
The following comments appeared in the previous post on the daily bar chart pattern of WTI Crude Oil: "The rally may continue till 51-51.50. Expect bears to start selling at any time."
Oil's price rallied to touch a high of 52 on Thu. May 25 '17 but plummeted below all three EMAs to 48.50 with a huge volume spike - forming a large 'reversal day' bar (higher high, lower close).
On Fri. May 26, oil's price dropped a little lower, but bounced up to close exactly at its 50 day EMA - forming another 'reversal day' bar (lower low, higher close).
OPEC and non-OPEC producers agreed to extend current level of production cuts till Mar '18. The market was perhaps expecting additional cuts - or, it was a case of 'sell on news'. The reasons don't really matter.
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.
Daily technical indicators are looking neutral to bearish. MACD and RSI are in neutral zones, but not showing much upward momentum. Slow stochastic has dropped sharply from its overbought zone.
Huge oil inventories in USA and oversupply in the market is likely to keep prices depressed. Saudi Arabia is trying to 'balance' the market by cutting exports to USA.
On longer term weekly chart (not shown), oil's price formed a 'reversal bar' and closed well below its 200 week EMA in a long-term bear market. Weekly technical indicators are in neutral zones. Only Slow stochastic is showing some upward momentum.
Brent Crude Oil chart
The following comments appeared in the previous post on the daily bar chart pattern of Brent Crude Oil: "The rally may have further upside - to 53-53.50. But bears are likely to 'sell the rise' at any time."
Oil's price rallied past 54.50 intra-day on Wed. May 24, but dropped to close below 54. The next day, it again crossed above 54.50 intra-day, but plunged below its three EMAs to 51 on the back of a strong volume surge.
On Fri. May 26, oil's price bounced up to close at its 50 day EMA - and above its 20 day and 200 day EMAs in bull territory.
But the bearish pattern of 'lower tops, lower bottoms' since the beginning of the year is still in force. Bears are very much on top.
Daily technical indicators are not showing any upward momentum. MACD and RSI are at their respective neutral zones. Slow stochastic has fallen like a stone from its overbought zone.
Expect bears to continue their selling at every rise.
On longer term weekly chart (not shown), oil's price formed a 'reversal bar' and closed well below its sliding 200 week EMA in a long-term bear market. Weekly technical indicators are in neutral zones. Only Slow stochastic is showing some upward momentum.
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.
