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Crude Oil Strong Bull Bar

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Market Overview: Crude Oil Futures

The weekly chart formed a Crude Oil strong bull bar closing above the 20-week EMA. The bulls need to get a follow-through bull bar to increase the odds of the bull leg beginning. The bears see the current move simply as a two-legged pullback and want the 20-week EMA and the bear trend line to act as resistance, forming a double top bear flag with the December 26 high being the first leg.

Crude oil futures

The Weekly crude oil chart

Crude Oil Weekly: Close above 20-Week EMA, Crude Oil Strong Bull Bar
  • This week’s candlestick on the weekly Crude Oil chart was a big bull bar closing near its high.
  • Last week, we said that Crude Oil may still be in the sideways to up minor pullback phase. Traders will see if the bulls can create sustained follow-through buying or will the market stall around the 20-week EMA area.
  • The bulls managed to create good follow-through buying closing above the 20-week EMA.
  • They see the selloff to the December 13 low simply as a bear leg within a trading range.
  • They want a reversal from a higher low major trend reversal (Dec 13), a wedge bull flag (Oct 6, Nov 16, and Dec 13) and a small double bottom (Dec 13 and Jan 3).
  • Since this week closed above the 20-week EMA, the bulls will need to create follow-through buying to increase the odds of the bull leg beginning.
  • The bears got a strong move down trading far below the 20-week EMA in a tight bear channel and consisting of 3 pushes therefore a wedge (Oct 6, Nov 16, and Dec 13).
  • They see the current move simply as a two-legged pullback and want the 20-week EMA and the bear trend line to act as resistance, forming a double top bear flag with the December 26 high being the first leg.
  • They want another leg down to retest the prior leg low (Dec 13) and the trading range low (May low).
  • Since this week’s candlestick is a bull bar closing near its high, it is a buy signal bar for next week.
  • For now, Crude Oil may still be in the sideways to up minor pullback phase. 
  • Traders will see if the bulls can create follow-through buying or will the market stall around the 20-week EMA area.
  • Crude Oil is currently in a 77-week trading range. Traders will BLSH (Buy Low, Sell High) until there is a breakout with sustained follow-through buying/selling from either direction.
  • The market is trading in the lower third of the trading range which is the buy zone of trading range traders. 
  • The bulls need to do more to show that they are now back in control by creating a few consecutive bull bars.

The Daily crude oil chart

Crude Oil Daily: FT buying above 20-Day EMA & Bear TL
  • Crude Oil traded sideways to up for the week. Thursday broke above the December 26 high with follow-through buying on Friday.
  • Last week, we said that the market may still be in the minor pullback (sideways to up) phase. If it remains weak and sideways, we will likely see more selling pressure return soon. 
  • The bulls manage to create a stronger leg up this week trading far above the 20-day EMA and the bear trend line. They got what they wanted.
  • They see the move down to December 13 simply as a bear leg within a trading range.
  • They want a reversal from a wedge pattern (Oct 6, Nov 16, and Dec 13) and a higher low major trend reversal (Dec 13). 
  • They hope to get a retest of the September high. 
  • If the market trades lower, they want a reversal from a higher low and the 20-day EMA to act as support followed by another leg up completing a wedge pattern with the first two legs being December 26 and January 26.
  • The bear got 3 pushes down, forming a wedge pattern (Oct 6, Nov 16, and Dec 13).
  • They want a retest of the December low after the current pullback.
  • They see the current pullback as forming a double top bear flag (Dec 26 and Jan 26).
  • For now, odds slightly favor the market to still be in the minor pullback (sideways to up) phase.
  • Traders will see if the bulls can create sustained follow-through selling.
  • If the bulls can get a series of consecutive bull bars closing near their highs, trading far above the 20-day EMA and the bear trend line, it can swing the odds in favor of the bull leg beginning. This remains true.
  • Crude Oil remains in a 77-week trading range. Traders will BLSH (Buy Low, Sell High) in trading ranges until there is a breakout with sustained follow-through buying/selling.
  • Most breakouts from a trading range fail 80% of the time. Odds slightly favor the trading range to continue.

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