Market Overview: Crude Oil Futures
The Crude oil bulls need strong follow-through buying breaking far above the January 29 high to increase the odds of a sustained move. Bears want the September 26 or July 30 highs to act as resistance. Bears need consecutive strong bear bars closing below the 20-week EMA to show they are regaining control.
Crude oil futures
The Weekly crude oil chart
- This week formed a large outside bull bar closing near its high, with a small tail above.
- Last week, we said traders would watch whether bulls could generate follow-through buying to retest and break above the January 29 high, or whether the market would stall and form a pullback closing below the 20-week EMA.
- The market traded lower early in the week but lacked follow-through selling and reversed to retest the January 29 high.
- Recently, bulls got a retest of the September high in the form of a 6-bar bull microchannel.
- Bulls want buyers below the first pullback from the bull microchannel and the 20-week EMA to hold as support; buyers appeared below the microchannel this week.
- The next bull target is the July 30 high; they want a retest of the range high.
- Bulls need consecutive strong bull bars breaking far above the January 29 high to increase the odds of a sustained move.
- Bears want the September 26 or July 30 highs to act as resistance.
- They see a potential large double top bear flag (September 26 and February 20), a wedge pattern (January 14, January 29, and February 20), and a smaller double top (January 29 and February 20).
- Bears need consecutive strong bear bars closing below the 20-week EMA to show they are regaining control.
- Crude Oil remains in a large trading range.
- Until there is a clear breakout with sustained follow-through, traders will likely continue to Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the range.
- The market has formed four overlapping candlesticks near the middle of the range, which can act as a magnet and area of balance.
- For now, traders will watch whether bulls can generate follow-through buying breaking far above the January 29 high, or whether the market stalls there and forms a pullback toward the 20-week EMA.
- Poor follow-through and frequent reversals remain hallmarks of a trading range environment.
The Daily crude oil chart
- The market traded lower early in the week but lacked follow-through selling. It reversed to retest the January 29 high on Thursday. Friday closed as a bear doji.
- Last week, we said traders would watch whether bulls could generate further follow-through buying above the January 29 high, or whether bears could produce consecutive strong bear bars well below the 20-day EMA.
- Bulls see the February 3 and February 17 moves as a double bottom breakout pullback testing the January 14 breakout point.
- They wanted a sideways-to-up leg to create a third push up in the wedge pattern, with the first two legs on January 14 and January 29 — and they got it this week.
- Bulls need consecutive strong bull bars trading well above the January 29 high to show control.
- If the market trades lower, bulls want the 20-day EMA to act as support.
- Bears see the current move as a bull leg testing the middle of the trading range.
- They want the September 26 high to act as resistance, followed by a reversal from a double top bear flag (September 26 and January 29), a large wedge pattern (January 14, January 29, and February 20), and a smaller double top (January 29 and February 20).
- Bears need consecutive strong bear bars breaking well below the 20-day EMA to flip the market to Always In Short.
- Bears want the January 29 or July 30 highs to act as resistance.
- The market remains in a large trading range.
- Until there is a clear breakout with sustained follow-through, traders will likely continue to Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the range.
- The last 17 candlesticks have overlapped sideways around the middle of the range, which can act as a magnet and area of balance.
- Traders will watch whether bulls can generate further follow-through buying above the January 29 high. If the market trades lower, they will watch whether the 20-day EMA continues to act as support.
- Or whether bears can produce consecutive strong bear bars well below the 20-day EMA to flip the market into Always In Short.
- Poor follow-through and frequent reversals remain hallmarks of a trading range environment.
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