Market Overview: Crude Oil Futures
The market formed a monthly Crude oil follow-through bull bar above the 20-month EMA. Bulls need more follow-through buying breaking strongly above the July high and the bear trend line to increase the odds of a strong bull leg. Bears want the July high or the bear trend line to act as resistance.
Crude oil futures
The Monthly crude oil chart
- February formed a follow-through bull bar closing near its high and above the 20-month EMA.
- Last month, traders were watching whether bulls could create follow-through buying, or whether the market would trade slightly higher but stall around the September or July highs, closing with a long tail above or a bear body.
- The market tested the 20-month EMA several times before moving higher in the second half of the month.
- Bears see the current rally as a bull leg within a broader trading range.
- They want the July high or the bear trend line to act as resistance.
- Bears are looking for a reversal from a double top bear flag (July 30 and February 27).
- Bears hope the move will have weak follow-through and reverse back below the 20-month EMA.
- If the market trades higher, bears want the candlestick to reverse and close with a long tail above or a bear body.
- Bears need strong consecutive bear bars to signal control.
- Bulls got a reversal from a wedge bull flag (August 13, October 20, December 16) and a higher low major trend reversal relative to the April 9 low.
- Bulls need more follow-through buying breaking strongly above the July high and the bear trend line to increase the odds of a strong bull leg testing the trading range high.
- Their next targets are the July 30 and June 23 highs.
- The market remains within a broad trading range.
- Until there is a clear breakout with sustained follow-through, traders may continue Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third.
- The midpoint of the range can act as a magnet and area of balance.
- Traders will watch whether bulls can create more follow-through buying — especially if strong — which would increase the odds of a retest of the trading range high.
- Or whether the market trades higher but stalls around the July high or the bear trend line, closing with a long upper tail or bear body instead.
- Poor follow-through and frequent reversals remain characteristic of trading ranges.
- The recent Middle East war escalation may increase volatility in Crude Oil.
The Weekly crude oil chart
- This week formed a bull bar closing in its upper half, with a long lower tail and a prominent upper tail.
- Last week, traders were watching whether bulls could generate follow-through buying breaking far above the January 29 high, or whether the market would stall there and pull back toward the 20-week EMA
- The market traded sideways to down before reversing higher later in the week.
- Bulls got a move up in a bull channel with overlapping candlesticks testing near the July high.
- The next targets for bulls are the July 30 and June 23 highs; they want a retest of the range high.
- Bulls need consecutive strong bull bars closing well above the July 30 high to increase the probability of a sustained breakout.
- Bears want the July 30 high to act as resistance.
- They see a potential large double top bear flag (July 30 and February 27) and a wedge pattern (January 14, January 29, February 27).
- If the market trades higher, they want the trading range high area (June 23) to act as resistance.
- Bears need consecutive strong bear bars to signal control.
- Crude Oil remains within a broad trading range.
- Until there is a decisive breakout with sustained follow-through, traders may continue Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third.
- The midpoint of the range can to act as a magnet.
- Traders will watch whether bulls can generate follow-through buying breaking far above the January 29 and July 30 highs, or whether the market trades higher but lacks follow-through and pulls back toward the 20-week EMA instead.
- Poor follow-through and frequent reversals remain characteristic of trading range conditions.
- The recent Middle East war escalation may increase volatility in Crude Oil.
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