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Weekly Crude Oil Higher Low

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Market Overview: Crude Oil Futures

The market formed a weekly Crude Oil higher low this week. The bulls want a reversal from a higher low major trend reversal (May 5) and a wedge pattern (Mar 5, Apr 9, and Mar 5). If the market trades higher, the bears want it to form a double top bear flag with the April 23 high and the 20-week EMA to act as resistance.

Crude oil futures

The Weekly crude oil chart

Crude Oil Weekly - Retest Low, HL MTR, Bulls Need FT, Weekly Crude Oil Higher Low
  • This week’s candlestick on the weekly Crude Oil chart was a big bull bar closing near its high with a prominent tail below.
  • Last week, we said traders would see if the bears could create a follow-through bear bar, or if the market would stall around the trading range low and trade higher instead.
  • The market traded lower early in the week but lacked follow-through selling and traded sideways to up thereafter.
  • The bulls see the recent move (April 9) as a large 2-legged sell vacuum and a bear leg within the trading range.
  • They see the move to the May 5 low as a retest of the prior low.
  • They want a reversal from a higher low major trend reversal (May 5) and a wedge pattern (Mar 5, Apr 9, and Mar 5).
  • They hope to get a retest of the middle of the trading range.
  • They need to create a follow-through bull bar next week to increase the odds of the bull leg beginning.
  • The bears got a large 2-legged bear leg testing the bottom of the trading range (Apr 9).
  • They hope to get a retest of the April 9 low, even if it only forms a higher low. They got it this week.
  • They got the third leg down, forming the wedge pattern (Mar 5, Apr 9, and Mar 5).
  • If the market trades higher, they want it to form a double top bear flag with the April 23 high and the 20-week EMA to act as resistance.
  • While the recent move down was strong, it could be a sell vacuum and a bear leg testing the bottom of the trading range.
  • Crude oil trades around the lower third of the trading range, which can be the buy zone for 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 a follow-through bull bar. That would increase the odds of a retest of the April 23 high or the middle of the trading range.
  • Or will the market trade slightly higher, but stall around the April 23 high or the 20-week EMA instead?
  • Poor follow-through and frequent reversals are hallmarks of trading ranges.

The Daily crude oil chart

Crude Oil Daily - HL MTR, Bulls Need FT Buying
  • The market gapped down on Monday but lacked follow-through selling. The market traded sideways to up for the rest of the week.
  • Previously, we said traders would see if the bulls could create more follow-through buying trading far above the 20-day EMA, or if the market would stall around the 20-day EMA area, followed by a retest of the April 9 low instead.
  • The market stalled around the 20-day EMA, followed by a retest of the April 9 low.
  • 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 see the move down to March 5 low as a retest of the prior low.
  • They want a reversal from a higher low major trend reversal and a wedge pattern (Mar 5, Apr 9, and May 5).
  • They want a retest of the middle of the trading range and a bull leg to retest the top of the trading range.
  • If the market trades lower, they want it to form a higher low (vs May 5 low).
  • They need to create strong bull bars closing far above the 20-day EMA to increase the odds of testing the middle of the trading range.
  • The bears got a large 2-legged bear leg and a sell vacuum within the trading range (Apr 9).
  • They then got a retest of the prior low, forming a higher low (May 5).
  • They see the current move as a pullback and want the 20-day EMA or the April 23 high to act as resistance.
  • They want another leg down from a double top bear flag with the April 23 high.
  • So far, the market has retested the prior low (May 5), followed by a pullback to the 20-day EMA.
  • The market currently trades around the lower third of the large trading range, which can be the buy zone of trading range traders.
  • 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 and the April 23 high.
  • Or will the market stall around the 20-day EMA area or the April 23 high area, followed by another leg down instead?
  • Poor follow-through and frequent reversals are hallmarks of a trading range.

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