WTI and Brent Crude Oil charts: sharp corrections find temporary support


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WTI Crude Oil chart

The daily bar chart pattern of WTI Crude Oil started correcting after touching a 52 week high of 76.90 on Oct 3. After receiving some support from its 50 day EMA, oil’s price dropped sharply below its 50 day EMA on Oct 17. 

Three days of sideways consolidation was followed by another sharp fall below its 200 day EMA on Oct 23. Since then, oil’s price has been consolidating within a bearish ‘flag’ pattern. Some more consolidation/correction is likely.

Daily technical indicators are looking bearish and oversold. MACD is falling below its signal line and entered its oversold zone. RSI is hovering just above its oversold zone. Slow stochastic is trying to emerge from its oversold zone.

The falling 20 day EMA has crossed below the falling 50 day EMA – like it did in Jun & Aug ’18 – indicating near term bearishness. However, oil’s price is trading just above its 200 day EMA, keeping bullish hopes alive. 

On longer term weekly chart (not shown), oil’s price bounced up after receiving support from its 50 week EMA, and closed above its 50 & 200 week EMAs in long-term bull territory. Weekly technical indicators 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.

Brent Crude Oil chart


Since touching a 52 week high of 86.74 on Oct 3, the daily bar chart pattern of Brent Crude Oil has undergone a sharp 13% correction. The 50 day EMA had provided some support on the downside.

However, on Oct 23, oil’s price dropped below 76 followed by a further drop to 75.11 the next day. Since then, there has been a bit of a price recovery. On Oct 29, oil’s price formed a ‘reversal day’ bar (higher high, lower close) that can lead to a correction towards the rising 200 day EMA. 

Daily technical indicators are looking bearish and a bit oversold. MACD is falling below its signal line, and looks poised to enter its oversold zone. RSI is below its 50% level. Slow stochastic is trying to emerge from its oversold zone.

Oil’s price is trading below its falling 20 day and 50 day EMAs – showing near term bearishness – but closed above its 200 day EMA in a bull market.

Rising global supply despite impending sanctions on Iran’s oil exports, and weakness in global stock markets are contributing to bearish sentiments in the oil market.

On longer term weekly chart (not shown), oil’s price dropped below its 20 week EMA after more than 2 months but manged to close above it, and well above its 50 week and 200 week EMAs in long-term bull territory. Weekly technical indicators are showing downward momentum. MACD is falling below its signal line in bullish zone. RSI and Slow stochastic are seeking support from their respective 50% levels.

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