Market Overview: Crude Oil Futures
Crude oil strong rally reversed higher closing above the bear trend line and the 20-week exponential moving average. The bulls need to create a follow-through bull bar to increase the odds of higher prices. Bears want a reversal lower from a double top bear flag with August 30 or July 29 high.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick on the weekly Crude Oil chart was big bull bar closing near the high.
- Last week, we said that Crude Oil may start to see some sideways to up pullback beginning within a few weeks. The pullback likely has begun this week.
- While the move down since June was in a tight bear channel, the candlesticks had a lot of overlapping price action. The bears are not yet as strong as they could have been.
- The bears want at least a small second leg sideways to down retesting the September low after a pullback.
- They want a reversal lower from a double top bear flag with August 30 or July 29 high.
- Bulls want a reversal from a wedge bull flag (June 22, July 14 and Sept 26) and a lower low major trend reversal.
- The bulls will need to create consecutive bull bars closing near their highs breaking far above the bear trend line and the 20-week exponential moving average to convince traders that the correction may be over.
- They got a strong rally this week, closing above the bear trend line and 20-week exponential moving average.
- The bulls will need to create a follow-through bull bar next week to increase the odds of higher prices.
- Since this week was a big bull bar closing near the high, odds favor at least slightly higher prices.
- Traders will see if the bulls can create a follow-through bull bar. If they do, especially if it is strong, increases the odds of a retest of July or August high.
- However, if next week trades higher, but reverses to close with a bear body instead, the odds of a retest of the September low would increase.
The Daily crude oil chart
- This week gapped up and continued to trade higher for the rest of the week.
- The bulls want a reversal from a wedge pattern (June 22, July 14 and Sept 26) and a lower low major trend reversal.
- The 20-week exponential moving average and bear trend line are resistances above.
- This week, the bulls created consecutive bull bars closing near their highs breaking far above the resistances.
- This was the strongest spike up since the sell-off in June.
- Traders expect at least a small second leg sideways to up after a small pullback.
- The bulls want to create a spike and channel with the August 30 and July 29 highs as the next targets.
- While the move down since June was in a tight bear channel, there was a lot of overlapping price action.
- That means the bears are not yet as strong as they could have been.
- The bears want a 2-legged sideways to down re-test of the Sept low after the pullback.
- If Crude Oil continues to trade higher, they want a reversal lower from a double top bear flag with August 30 or July 29 high.
- For now, the spike up this week is strong enough for traders to expect at least slightly higher prices and a second leg sideways to up after a small pullback.
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