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Crude Oil Bulls Need More Follow-through Buying

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Market Overview: Crude Oil Futures

The Crude Oil bulls need more follow-through buying to increase the odds of the bull leg trading higher. The bears want a lower high and a double top bear flag with the April 2 high. They want the 20-week EMA or the bear trend line to act as resistance.

Crude oil futures

The Weekly crude oil chart

Crude Oil Weekly - Bulls Need More FT Buying, Crude Oil Bulls Need More Follow-through Buying
  • This week’s candlestick on the weekly Crude Oil chart was a bear doji closing around the middle of its range.
  • Last week, we said the market could still be in the sideways to up pullback phase. Traders would see if the bulls could create a follow-through bull bar or if the move would lack follow-through buying and the candlestick close with a long tail above or a bear body instead.
  • The market traded sideways for the week.
  • The bulls see the recent move (April 9) as a large 2-legged sell vacuum and a bear leg within the trading range.
  • They want the bull leg to begin and see this week as a pullback. They want a second leg sideways to up.
  • They hope to get a retest of the middle of the trading range (around the 20-week EMA).
  • If the market trades lower, they want it to form a higher low major trend reversal.
  • The bears got a large 2-legged bear leg testing the bottom of the trading range (May 4, 2023).
  • They see the current move as a pullback and a retest of the breakout point (Mar 5).
  • They want a lower high and a double top bear flag with the April 2 high.
  • They want the 20-week EMA or the bear trend line to act as resistance.
  • They hope to get a retest of the April 9 low after the pullback, even if it only forms a higher low.
  • While the recent move down was strong (Apr 9), it could still only be a sell vacuum and a bear leg testing the bottom of the trading range.
  • Crude oil is currently trading around the lower third of the trading range which is the buy zone of trading range traders.
  • The market remains in a large trading range.
  • Traders will BLSH (Buy Low, Sell High) until there is a breakout from either direction with sustained follow-through buying/selling.
  • That means selling in the upper third and buying in the lower third of the trading range.
  • For now, traders will see if the bulls can create more follow-through bull bars. That would increase the odds of a retest near the 20-week EMA.
  • Or will the market stall around the current levels and form a retest of the April 9 low instead?
  • Poor follow-through and frequent reversals are hallmarks of trading ranges.

The Daily crude oil chart

Crude Oil Daily - Bulls Need FT Buying; Bears Want Retest Low
  • The market traded sideways early in the week. Wednesday traded higher but reversed into an outside bar. There was no follow-through selling on Thursday and Friday.
  • Last week, we said the market could still be in the sideways to up pullback phase. Traders would see if the bulls could create sustained follow-through buying trading far above the 20-day EMA or if the market would stall around the 20-day EMA area and form a retest of the April 9 low instead.
  • The bulls see the move to the April 9 low as a large 2-legged bear leg and a sell vacuum within the trading range.
  • They got a reversal from a climactic selloff and want the bull leg to begin.
  • At the least, they want a TBTL (Ten Bars, Two Legs) pullback lasting a few weeks. So far, the pullback has met the minimum requirement.
  • They want a retest of the middle of the trading range.
  • They want another leg up completing the wedge pattern with the first 2 legs being the April 10 and April 23 highs.
  • If the market trades lower, they want it to form a higher low followed by a reversal from a higher low major trend reversal.
  • The bears got a large 2-legged bear leg and a sell vacuum within the trading range.
  • While the move down was strong, it was also climactic.
  • They see the current move as a two-legged pullback (Apr 10 and Apr 23) and a retest of the breakout point (Mar 5).
  • 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 wedge pattern (the first two legs being Apr 10 and Apr 23) and a large double top bear flag with the April 2 high.
  • They hope to get at least a small sideways to down leg to retest the recent extreme low (Apr 9) after the pullback, even if it only forms a higher low.
  • So far, the market has formed a two-legged sideways to up pullback testing the 20-day EMA.
  • The market remains in a large trading range. Traders will BLSH (Buy Low, Sell High) within the trading range.
  • That means buying in the lower third and selling in the upper third of the trading range.
  • For now, traders will see if the bulls can create more follow-through buying trading far above the 20-day EMA.
  • Or will the market stall around the 20-day EMA area followed by a retest of the April 9 low instead?
  • Poor follow-through and frequent reversals are hallmarks of a trading range.

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