Market Overview: Crude Oil Futures
The Crude oil futures was a failed breakout below September low. December traded far below Sept low and the bull trend line but reversed to close above it. The bears failed to get a follow-thorough bear bar. Bulls want a reversal higher from a lower low major trend reversal.
Crude oil futures
The Monthly crude oil chart
- The December monthly Crude Oil candlestick was almost a perfect doji with a long tail below. A failed breakout below the September low.
- Previously, we said that Crude Oil is in a trading range of around 74 and 94 and is also forming an expanding triangle.
- December broke below the major bull trend line and 20-month exponential moving average but reversed to close above it.
- The bears got a second leg sideways to down breaking below the September low. However, the breakout failed, and Crude Oil reversed to close above the September low.
- They want another attempt to break below the 20-month exponential moving average and the major bull trend line after a pullback (bounce).
- The bulls want a reversal higher from a lower low major trend reversal.
- They see the move down since June simply as a deep pullback following the buy climax and want a retest of the June high.
- Since December was a doji bar with a long tail below, it is not a strong sell signal bar for January.
- Crude Oil is in a trading range of around 70 and 94 and is also forming an expanding triangle.
- Traders will BLSH (Buy Low, Sell High) until there is a strong breakout from either direction.
- The major bull trend line and 20-month exponential moving average are supports below.
- For now, since the bears were not able to create follow-through selling, odds slightly favor crude oil to trade at least a little higher.
- The US Government started buying oil and refilling the SPR (Strategic Petroleum Reserve). (Source: Reuters – U.S begins buying back oil…)
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was a bull doji with a long tail below.
- Previously, we said that traders will see if the bulls can break above the inside bull doji. If they do, especially if it is a strong breakout closing near its high, the odds of a retest of the 20-week exponential moving average and the bear trend line increase.
- The bears got a reversal lower from a double top bear flag (October 10 and November 7).
- They then got the second leg sideways to down breaking below the September low in December. However, they failed to get follow-through selling.
- Bears hope that the last 3 weeks were simply a pullback and want another leg down breaking below December low, completing the wedge pattern (the first two legs being Sept 26 and Dec 12).
- They want a strong breakout and a measured move down using the height of the September to November trading range which will take them to around $56.
- For that, the bears will need to create consecutive bear bars closing near their lows to convince traders of lower prices.
- The bulls want a failed breakout below the September low and the bull trend line. So far, the breakout below September had no follow-through selling.
- They want a reversal higher from a lower low major trend reversal and a micro double bottom (Dec 9 and Dec 12).
- The bulls got a breakout above the inside bar and some follow-through buying.
- They need to create consecutive bull bars closing near their highs breaking far above the 20-week exponential moving average and the bear trend line to convince traders of a reversal higher.
- Since this week’s candlestick was a bull doji with a long tail below, it is a weaker buy signal bar. It is not a good sell signal bar.
- For now, odds slightly favor Crude Oil to trade at least a little higher towards the 20-week exponential moving average and the bear trend line which are resistances above.
- Traders will see if the bulls can continue to create consecutive bull bars or if Crude Oil trades higher but stalls around the resistances above.
- The US Government will start buying oil and refilling the SPR (Strategic Petroleum Reserve). (Source: Reuters – U.S begins buying back oil…)
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