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No Crude Oil Breakout

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Market Overview: Crude Oil Futures

There is no Crude Oil breakout above the expanding triangle yet on the weekly chart. The bears want a reversal from a lower high major trend reversal, a double top bear flag (Apr 26 and Jun 28) and from around the top of the broadening triangle. The bulls hope to get a strong breakout above the broadening triangle.

Crude oil futures

The Monthly crude oil chart

Crude Oil Monthly: No FT Selling, Bulls Want BO
  • The June monthly Crude Oil candlestick was a bull bar closing near its high with a long tail below.
  • Last month, we said that the odds slightly favor the market to trade at least a little lower. Traders will see if the bears can create a follow-through bear bar closing below the 20-month EMA or will the market continue to stall around the 20-month EMA area.
  • The market traded lower earlier in the month but reversed up thereafter for the rest of the month.
  • The bears got a reversal from a lower high major trend reversal (Apr 12) and a wedge bear flag (Nov 7, Sep 28, and Apr 12).
  • They wanted the market to close below the 20-month EMA (June) but did not get it. The bears are not yet as strong as they hoped to be.
  • If the market trades higher, they want the bear trend line to act as resistance.
  • Previously, the bulls got a reversal from a higher low major trend reversal (December) and a double bottom bull flag (May 4 and Dec 13).
  • While the market traded higher, the bulls were not able to get a strong breakout above the bear trendline. The bull leg formed a lower high.
  • The bulls hope that the recent sideways-to-down move is simply a pullback and want at least a small retest of the April 12 high.
  • They want a reversal from a wedge bull flag (May 4, Dec 13, and June 4) and a higher low.
  • They hope to get a strong follow-through bull bar in July with the next targets being the April high and the September high.
  • They want the 20-month EMA and the bull trend line to continue acting as support.
  • Since June was a bull bar closing near its high, it is a buy signal bar for July.
  • Odds slightly favor the market to trade at least a little higher.
  • Traders will see if the bull can create a follow-through bull bar breaking above the bear trend line.
  • Or will the market trade slightly higher but stall around the bear trend line area?
  • The bear bars since the December low is becoming smaller with weaker follow-through (decreasing selling pressure).
  • If the bulls can create sustained follow-through buying, we may start to see a retest of the trading range high in the months ahead.
  • 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 market is trading around the 20-month EMA, which is the middle of the large trading range. It can be a magnet and an area of balance.
  • The possibility of a broadened military conflict in the Middle East will increase the volatility of energy prices.

The Weekly crude oil chart

Crude Oil Weekly: No BO above Triangle Yet, No Crude Oil Breakout
  • This week’s candlestick on the weekly Crude Oil chart was a bull bar closing around the middle of its range with a long tail above.
  • Last week, we said that the market may still trade at least a little higher. Traders will see if the bulls can create another follow-through bull bar will the market trade slightly higher but stall and close with a long tail above or with a bear body?
  • The bulls managed to create follow-through buying breaking above the bear trend line.
  • They got a reversal from a wedge (Apr 22, May 8, and June 4) and a higher low major trend reversal.
  • The next target for the bulls is the April 12 high.
  • They hope to get a strong breakout above the broadening triangle.
  • If there is a pullback, the bulls want the 20-week EMA to act as support.
  • The bears got 3 pushes lower forming a wedge (Apr 22, May 8, and June 4). 
  • They see the last three weeks as a deep pullback and want the market to reverse below the 20-week EMA.
  • They want a reversal from a lower high major trend reversal, a double top bear flag (Apr 26 and Jun 28) and from around the top of the broadening triangle.
  • They hope to get a retest of the June 4 low, even if it forms a higher low.
  • Since this week’s candlestick is a bull bar closing around the middle of its range (with a long tail above), it is not a strong sell signal bar for next.
  • It is following a strong spike up and a 4-bar bull micro channel. There may be buyers below the first pullback.
  • For now, odds slightly favor any pullback to be minor followed by a retest of the current leg extreme high (now Jun 28).
  • Traders will see if the bulls can create a breakout above the broadening triangle or will the market stall around the current levels followed by a pullback towards the middle of the trading range (20-week EMA area).
  • If the bulls can create follow-through buying, especially one trading far above the broadening triangle, the odds of a retest of the April highs will increase.
  • The middle of the large trading range is an area of balance and a magnet.
  • 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.
  • Poor follow-through and reversals are hallmarks of a trading range.
  • Sidenote: The prospect of a broadening war in the Middle East can cause volatility in energy prices.

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