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Weak Crude Oil Bull Doji

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Market Overview: Crude Oil Futures

The market formed a weak Crude Oil bull doji closing below the 20-week EMA. The bulls want a reversal from a double bottom bull flag (Oct 1 and Oct 29). They must create bull bars trading above the 20-week EMA to increase the odds of testing the October 8 high. The bears see the current move (Nov 7) as a pullback and want a retest the October low from a lower high.

Crude oil futures

The Weekly crude oil chart

Crude Oil Weekly - Tight Trading Range, Weak Entry Bar, Weak Crude Oil Bull Doji
  • This week’s candlestick on the weekly Crude Oil chart was a bull doji closing in its lower half with a long tail above.
  • Last week, we said that traders would see if the bulls could create a follow-through bull bar or if the bears could create a retest of the October low instead. The overlapping candlesticks, poor follow-through and frequent reversals are the hallmarks of trading range price action.
  • The market gapped up and traded sideways to up for most of the week but pulled back lower on Friday to close off the week’s high.
  • The bulls see the current move as a pullback and want a retest of the October 8 high.
  • They want a reversal from a double bottom bull flag (Oct 1 and Oct 29).
  • While this week traded higher, the bulls were not able to create a strong entry bar which indicates that they are not yet as strong as they hoped to be.
  • They must create bull bars trading above the 20-week EMA to increase the odds of testing the October 8 high.
  • If the market trades lower, they want the October low or the bottom of the triangle to act as support.
  • The bears see the current move (Nov 7) as a pullback and want a retest the October low from a lower high.
  • They want the 20-week EMA to act as resistance. So far this is the case.
  • They must create strong bear bars with follow-through selling to increase the odds of a breakout below the triangle.
  • Since this week’s candlestick is a bull doji closing in its lower half, it is not a strong buy signal bar for next week. It can be a sell signal bar.
  • However, the overlapping candlesticks indicate the market is in a tight trading range.
  • Poor follow-through and frequent reversals are the hallmarks of trading range price action.
  • For now, traders will see if the bears can create a strong entry bar by trading below this week’s low.
  • Or will the market continue to stall around the current levels and trade sideways to up in the next few weeks instead?
  • The middle of the trading range is an area of balance.
  • The lower third of the large trading range can be the buy zone of trading range traders.
  • The market is in a large trading range (Trading range high: September 29, Trading range low: May 4).
  • Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.

The Daily crude oil chart

Crude Oil Daily - Tight Trading Range, DT BF or DB BF
  • The market traded sideways to up above the 20-day EMA for most of the week followed by a pullback on Friday closing slightly below the moving average.
  • Previously, we said that the recent candlesticks have a lot of overlapping ranges which indicates tight trading range price action. Poor follow-through and reversals are hallmarks of a trading range.
  • The bears see this week (Nov 7) as part of a two-legged pullback.
  • They want a reversal from a double top bear flag (Oct 24 and Nov 7).
  • They want at least a small second leg sideways to down to retest the recent leg low (Oct 29).
  • If the market trades higher, they want another lower high and the top of the triangle to act as resistance.
  • The bulls see the recent move (to Oct 29) as a deep pullback. They want a reversal from a double bottom bull flag (Oct 1 and Oct 29) and a higher low major trend reversal.
  • They want another leg up to retest the top of the triangle.
  • The bulls must create consecutive bull bars closing near their highs, trading far above the 20-day EMA to increase the odds of a retest of the October 8 high.
  • So far, the candlesticks in the last 4 weeks have a lot of overlapping ranges which indicates tight trading range price action.
  • Poor follow-through and reversals are hallmarks of a trading range.
  • For now, traders will see if the bears can create another leg down to retest the October 29 low.
  • Or will the market stall and trade sideways to up in the next few weeks instead?
  • The lower third of the large trading range can be the buy zone of trading range traders.
  • The middle of the trading range is an area of balance and a magnet.
  • Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.

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