Market Overview: Crude Oil Futures
The weekly Crude oil bears want follow-through selling to increase the odds of a sustained move. Bulls want the April 17 or the March 10 lows to provides support.
Crude oil futures
The Weekly crude oil chart
- This week formed a bear bar closing slightly below the middle of its range with a prominent lower tail and below the 20-week EMA after gapping down on Monday.
- Last week, we said traders would watch whether bears could generate follow-through bear bars breaking below the bottom of the triangle and the 20-week EMA, or whether the market would trade lower but find support near the April 17 or March 10 lows.
- Bulls see the current move as a pullback forming a large double bottom bull flag (April 17 and June 18).
- Bulls want the April 17 low to act as support.
- If the market trades lower, bulls hope the bottom of the trading range near the March 10 low provides support.
- Bulls need consecutive bull bars closing near their highs to demonstrate control.
- Bears got a bear leg from a wedge top (April 7, April 30, and May 18) and a lower high major trend reversal.
- The next target for bears is the March 10 low.
- If the market trades higher, bears want the pullback to be weak, with overlapping candlesticks and prominent upper tails, forming a lower high relative to the June 3 high.
- Bears want a larger second leg sideways to down.
- Bears need to generate more follow-through selling to increase the odds of a sustained move lower.
- Crude oil broke below the triangle and the 20-week EMA, testing near the bottom of the 15-week trading range.
- The market remains in a trading range where traders may continue to Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the range, until there is a strong breakout with follow-through.
- The middle of the range is an area of balance and can act as a magnet.
- Traders will watch whether bears can generate additional follow-through bear bars breaking below the April 17 low.
- Or whether the market stalls around the April 17 low, followed by a pullback to test the middle of the trading range in the weeks ahead.
The Daily crude oil chart
- The market gapped down on Monday, followed by continued selling on Tuesday. Thursday traded slightly lower but reversed to form a small bull reversal bar.
- Last week, we said traders would watch whether bears could generate a strong breakout below the triangle with sustained follow-through selling, or whether the market would trade lower but find support near the April 17 or March 10 lows instead.
- Bulls see the current move as a pullback forming a large double bottom bull flag (April 17 and June 18).
- Bulls want the April 17 or March 10 lows to provide support.
- Bulls need consecutive bull bars closing near their highs and breaking above the 20-day EMA and the bear trend line to demonstrate control.
- Bears got a bear leg from a wedge top (April 7, April 30, and May 18) and a double top bear flag (April 30 and May 18).
- Bears want a retest of the trading range low near the March 10 low.
- If the market trades higher, bears want the 20-day EMA or the June 11 high to act as resistance, forming another lower high and a double top bear flag.
- Bears want any pullback to be weak, with overlapping bars and prominent upper tails.
- Bears need sustained follow-through selling to increase the odds of a successful breakout below the trading range.
- Crude oil broke below the triangle, testing the April 17 low.
- The market remains in a trading range where traders may continue to Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the range, until there is a strong breakout with follow-through.
- The middle of the range is an area of balance and often acts as a magnet.
- Traders will watch whether bears can generate additional follow-through selling to test the March 10 low. If a pullback develops, traders will watch whether the 20-day EMA or the bear trend line acts as resistance.
- Or whether the market finds support around the April 17 low, followed by a pullback higher in the weeks ahead.
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