Curso de Trading do Brooks

Aprenda a operar price action consistentemente

 

More results...

Crude Oil Sideways Trading Range

By

Market Overview: Crude Oil Futures

The weekly chart formed a Crude Oil sideways trading range with overlapping bars. The bulls will need to create follow-through buying trading above the 20-week EMA to increase the odds of the bull leg beginning. The bears want another leg down to retest the prior leg low (Dec 13) and the trading range low (May low).

Crude oil futures

The Weekly crude oil chart

Crude Oil Weekly: Tight Trading Range, Inside Doji, Crude Oil Sideways Trading Range
  • This week’s candlestick on the weekly Crude Oil chart was an inside bull doji closing around the middle of its range.
  • 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 more follow-through buying or will the market stall around the 20-week EMA area.
  • The market continues to trade sideways below the 20-week EMA area.
  • The bulls 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).
  • They will need to create follow-through buying trading above the 20-week EMA to increase the odds of the bull leg beginning.
  • If the market trades lower, the bulls hope that the sideways tight trading range will be the final flag of the move down.
  • 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 the pullback to be sideways with overlapping candlesticks, doji(s) and bear bars. So far this is the case.
  • 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 an inside bull doji, it is a neutral bar for next week.
  • For now, Crude Oil may still be in the sideways to up minor pullback phase. 
  • However, if the bulls continue to fail creating sustained follow-through buying, we may start to see more selling pressure soon.
  • Traders will see if the bulls can create sustained follow-through buying or will the market stall around the 20-week EMA area.
  • Crude Oil is currently in a 76-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. 
  • However, the bulls still need to do more to show that they are now back in control.

The Daily crude oil chart

Crude Oil Daily: Tight Trading Range, Wedge Bear Flag?
  • Crude Oil traded sideways to up for the week. Thursday closed above the 20-day EMA but there was no follow-through bull bar on Friday.
  • Last week, we said that the market may still be in the minor pullback (sideways to up) phase. 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 might swing the odds in favor of the bull leg beginning.
  • 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, followed by another strong leg down after the current pullback.
  • They want the 20-day EMA or the bear trend line to act as resistance. 
  • If the market trades higher, they want a reversal from a double top bear flag (Dec 26 and Jan 12) or a wedge bear flag (with the first two legs being Dec 26 and Jan 12).
  • The bulls 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. 
  • They will need to create consecutive bull bars closing near their highs, trading far above the 20-day EMA and the bear trend line to increase the odds of higher prices.
  • At the very least, they want a TBTL (Ten Bar, Two Leg) sideways to up pullback. So far, the minimum requirement has been fulfilled.
  • If the market trades lower, the bulls hope that the sideways trading range will be the final flag of the move down. 
  • They want the December low or the May trading range low to act as support.
  • For now, the market may still be in the minor pullback (sideways to up) phase. If it remains weak and sideways (as it is currently), we will likely see more selling pressure return soon. 
  • 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.
  • Crude Oil remains in a 76-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.

Market analysis reports archive

You can access all weekend reports on the Market Analysis page.

>