Market Overview: Crude Oil Futures
Crude oil gap up above the 20-week exponential moving average on the weekly chart and formed a bull doji. The bulls need to create a strong breakout above the trading range high with follow-through buying to increase the odds of a reversal up. The bears want the market to stall around the trading range high.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was a bull doji after gapping above the 20-week exponential moving average.
- Last week, we said that odds slightly favor Crude Oil to trade at least a little higher, likely retesting the 20-week exponential moving average.
- The bulls want a failed breakout below the 16-week trading range. They hope that the tight trading range is the final flag of the move down.
- They got a reversal up from a lower low major trend reversal and a wedge bottom (Sept 26, Dec 9, and Mar 20).
- They want a breakout above the 16-week trading range and a retest of November and June highs.
- For that, the bulls will need to create a strong breakout above the 16-week trading range high with follow-through buying to increase the odds of a reversal higher.
- If Crude Oil trades lower, they want a reversal up from a higher low major trend reversal (Mar 20).
- The bears got a breakout below the triangle and 16-week trading range but did not get follow-through selling.
- They hope that the current deep pullback will form another lower high (against the November high).
- They want the market to stall around the trading range high and retest of March low.
- Since this week was a small bull doji, it is a buy signal bar for next week,
- The big gap-up is also a sign of strength from the bulls.
- For now, odds slightly favor Crude Oil to trade at least a little higher and at least a small second leg sideways to up after a small pullback.
- Traders will see if the bulls can create a follow-through bull bar following this week’s close above the 20-week exponential moving average, or will the Crude Oil trade slightly higher but stall around the trading range high.
- There are a lot of overlapping price action since November. That means the market is in a trading range.
- Traders will BLSH (Buy Low, Sell High) in trading ranges until there is a strong breakout from either direction with follow-through buying/selling.
The Daily crude oil chart
- Crude Oil gapped up on Monday followed by sideways trading.
- Previously, we said that odds slightly favor Crude Oil to still be in the sideways to up pullback phase and for at least a small second leg sideways to down after this pullback (bounce) is over.
- This week, the market traded sideways to up with a big gap up.
- The bulls hope that the market has flipped into Always In Long.
- They want a failed breakout below the 16-week trading range.
- They broke the bear trend line by trading sideways.
- They hope that the 16-week trading range will be the final flag of the move down.
- They got a reversal up from a lower low major trend reversal and a wedge bottom (Sept 26, Dec 9 and Mar 20).
- The bulls will need to break far above the trading range high with follow-through buying to convince traders that a reversal up may be underway.
- The move up from the March 20 low is strong enough for the bulls to expect at least a small second leg sideways to up after a small pullback.
- Recently, the bears got a breakout trading far below the triangle and 16-week trading range low with some follow-through selling.
- They want at least a small second leg sideways to down, retesting March 20 low.
- Instead, Crude Oil traded higher in a tight bull channel with bull bars closing near their highs.
- The bears hope that the rally is simply a buy vacuum test of the trading range high.
- They want the market to stall around the trading range high and reverse lower.
- For now, odds slightly favor Crude Oil to trade at least a little higher and a small second leg sideways to up after a small pullback.
- Traders will see if the bulls can create a strong breakout above the trading range high or will the market stall there and reverses lower.
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