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Crude Oil Overlapping Inside Bar

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Market Overview: Crude Oil Futures

The weekly chart formed a Crude oil overlapping inside bar around the middle of the trading range. Bears want a reversal from a double top bear flag (September 26 and January 29). Bulls see this week as a pullback and want at least a small sideways-to-up leg to retest the January 29 high.

Crude oil futures

The Weekly crude oil chart

Crude Oil Weekly - Overlapping Inside Bear Bar, 5-Bar Bull MC, Crude Oil Overlapping Inside Bar
  • This week’s Crude Oil candlestick was an inside bear bar closing in its upper half with a long lower tail.
  • Last week, we said traders would watch whether bulls could produce more follow-through buying and break above the September 26 high, or whether the market would stall around the September 26 or July 30 highs instead.
  • The market traded sideways within last week’s range, with both bulls and bears active.
  • Recently, bulls got a reversal from a large wedge bull flag (August 13, October 20, and December 16) and a major higher low trend reversal relative to the April 9 low.
  • Bulls want a strong bull leg to retest the trading range high.
  • They see this week as a pullback and want at least a small sideways-to-up leg to retest the January 29 high.
  • If the market trades lower, bulls want the 20-week EMA to act as support.
  • The next target for bulls is the July 30 high.
  • Bears see the current move as a buy vacuum test of the September 26 high and the middle of the trading range.
  • They want a reversal from a double top bear flag (September 26 and January 29).
  • 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 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 is currently trading near the middle of the range, which can act as a magnet and an area of balance.
  • The move up from the January 7 low formed a 5-bar bull microchannel, indicating persistent buying. The long lower tail this week suggests bears are not yet strong.
  • For now, traders will watch whether bulls can generate more follow-through buying to retest and break above the January 29 high.
  • Or whether the market stalls and forms a pullback closing below the 20-week EMA instead.
  • Poor follow-through and frequent reversals remain hallmarks of a trading range environment.

The Daily crude oil chart

Crude Oil Daily - Bulls Want 3rd Leg Up, Bears Want LH
  • The market formed a pullback testing the 20-day EMA on Tuesday, followed by a retest of the January 29 high, forming a lower high (February 4).
  • Previously, we said traders would watch whether bulls could produce further follow-through buying above the October high, or whether bears could create consecutive strong bear bars trading well below the 20-day EMA instead.
  • Bulls got a reversal from a large wedge bull flag (August 13, October 20, and December 16) and a large higher low major trend reversal relative to the April 9 low.
  • They got a strong breakout above the October high, testing the September 26 high.
  • Bulls see the moves on February 3 and February 6 as a breakout pullback test of the January 14 breakout point, forming a small double bottom bull flag.
  • They want another 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.
  • Bulls need consecutive strong bull bars trading well above the January 29 high to show firm control.
  • If the market trades lower, bulls want the 20-day EMA or the January 20 low 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) and a large wedge pattern (December 26, January 14, and January 29).
  • If the market trades higher, bears want it to stall around the January 29 high, forming a double top.
  • Bears need consecutive strong bear bars breaking well below the 20-day EMA to flip the market into Always In Short.
  • 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 market is trading near the middle of the range, which can act as a magnet and area of balance.
  • Buying pressure since the January 7 low has been stronger (consecutive strong bull bars closing near their highs) compared to weaker selling pressure (bear bars with limited follow-through).
  • For now, 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 it stalls around the 20-day EMA or the January 20 low.
  • Or whether bears can produce consecutive strong bear bars trading well below the 20-day EMA instead, flipping the market into Always In Short.
  • Poor follow-through and frequent reversals remain hallmarks of a trading range environment.

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