Market Overview: Crude Oil Futures
Crude oil bulls want a breakout above the triangle to retest the March 9 high and continue the trend. Bears see the current move as a retest of the prior high and want the bear trend line to act as resistance.
Crude oil futures
The Weekly crude oil chart
- This week formed an inside bull bar closing near its high.
- Last week, we said traders would watch whether bears could generate follow-through selling to retest the bottom of the range near the April 17 low, or whether the market would trade higher to test the bear trend line instead.
- Bulls want a breakout above the triangle to retest the March 9 high and continue the trend.
- They see the recent pullback as forming a wedge bull flag (March 23, April 17, and May 6).
- Bulls need consecutive bull bars closing near their highs and breaking strongly above the triangle to increase the odds of trend resumption.
- Bears see the current move as a retest of the prior high and want the bear trend line to act as resistance.
- They want a reversal from a wedge top (March 9, April 7, and April 30).
- If the market trades higher, bears want the March 9 high to act as resistance.
- Bears need consecutive bear bars closing near their lows and breaking far below the April 17 low to demonstrate control.
- Crude oil is forming a broad contracting triangle, with the market contained within two converging trend lines.
- The market is currently testing near the top of the triangle.
- The market remains in a trading range with overlapping price action. Traders may continue to Buy Low, Sell High (BLSH) — buying near the lower third and selling near the upper third — until there is a strong breakout with follow-through.
- The middle of the range can act as an area of balance and a magnet.
- Traders will watch whether bulls can generate a strong breakout above the bear trend line.
- Or will the market stall below the April 30 high, forming another lower high, followed by a pullback to the middle of the range instead?
- External factors, such as developments in the Middle East, could accelerate or reverse the current move.
The Daily crude oil chart
- The market traded sideways to up this week.
- Last week, we said traders would watch whether bears could generate follow-through selling to retest the bottom of the range near the April 17 low, or whether the market would trade higher to retest the bear trend line instead.
- Bulls want a breakout above the triangle, followed by a retest of the March 9 high and resume the trend.
- Bulls see a large wedge bull flag (March 23, April 17, and May 6) forming.
- If the market trades lower, bulls want it to form a higher low, with the bull trend line acting as support.
- Bulls need consecutive bull bars closing near their highs and breaking strongly above the bear trend line to increase the odds of trend resumption.
- Bears see the current move as a retest of the prior high and want the top of the triangle to act as resistance.
- They want a reversal from a wedge top (March 9, April 7, and April 30) and a lower high major trend reversal.
- They want the move to form another lower high, followed by a retest of the bottom of the triangle.
- Bears need consecutive bear bars closing near their lows and breaking far below the April 17 low to demonstrate control.
- Crude oil is forming a broad contracting triangle with lower highs and higher lows.
- The market remains in a trading range with overlapping price action. Traders may continue to Buy Low, Sell High (BLSH) — buying near the lower third and selling near the upper third — 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 bulls can generate a strong breakout above the triangle, or whether the market stalls at a lower high, followed by a retest of the bottom of the triangle instead.
- External factors, such as developments in the Middle East, could accelerate or reverse the current move.
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