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Crude Oil Retest of the October Low

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Market Overview: Crude Oil Futures

The market is forming a Crude oil retest of the October low. Bulls want a reversal from a higher low major trend reversal and a wedge bull flag (Nov 6, Nov 13, Nov 21). Bears hope for a strong bear leg breaking below the October low to test the lower boundary of the trading range.

Crude oil futures

The Weekly crude oil chart

Crude Oil Weekly - Micro Wedge Bull Flag, Crude Oil Retest of the October Low
  • This week’s Crude Oil candlestick was a bear bar closing in its lower half with a small tail below.
  • Last week, we said traders would watch whether bears could create more follow-through selling to retest the October low, or if the market would reverse and close back above the 20-week EMA.
  • The market traded higher early in the week to test the 20-week EMA but reversed lower from Wednesday onward.
  • Bulls see the selloff (Oct 20) as a large two-legged bear leg within the trading range (first leg: Jun 23–Aug 13).
  • They see the current decline as a retest of the October low and want a reversal from a higher low major trend reversal and a wedge bull flag (Nov 6, Nov 13, Nov 21).
  • Bulls need strong consecutive bull bars closing far above the 20-week EMA and the bear trendline to show they are taking control.
  • Bears see the rally to the October 24 high as a pullback and want the 20-week EMA and the bear trendline to continue acting as resistance. So far, that has held.
  • They want a second leg sideways to down to retest the October 20 low — even if it forms a higher low — from a large wedge bear flag (Jul 30, Sep 26, Oct 24). That move is currently underway.
  • Bears hope for a strong bear leg breaking below the October low to test the lower boundary of the trading range.
  • Crude Oil remains in a large trading range.
  • Traders will likely continue to Buy Low, Sell High within the range — buying near the lower third and selling near the upper third — until a clear breakout with sustained follow-through appears.
  • The past four weeks formed a retest of the October low with overlapping bars, indicating the bears are not decisively strong.
  • The market is trading near the lower third of the trading range, and there could be buyers there.
  • For now, traders will watch whether bears can create more follow-through selling to retest and break below the October low.
  • Or will buyers appear again around the October low area instead?
  • Poor follow-through and frequent reversals remain hallmarks of a trading range.

The Daily crude oil chart

Crude Oil Daily - High 4, Bulls Need FT Buying
  • The market traded slightly higher early in the week but reversed below the 20-day EMA from Wednesday onward.
  • Last week, we said traders would watch whether bears could create more follow-through selling below the 20-day EMA, or if bulls could generate a retest of the October 24 high with follow-through buying.
  • Previously, bulls created a rally from a large wedge bull flag (Jun 24, Aug 13, Oct 20).
  • They see the current pullback forming a large High 4 bull flag and want the move to form a higher low relative to October 20.
  • Bulls want a strong leg up breaking far above the 20-day EMA and the bear trendline.
  • They need strong consecutive bull bars trading above the 20-day EMA and the bear trendline to show they are regaining control.
  • Bears see the rally to the October 24 high as a pullback and want a reversal from a large wedge bear flag (Jul 30, Sep 26, Oct 24).
  • They want a retest of the recent low (Oct 20), even if it only forms a higher low — which is currently the case.
  • If the market trades higher, bears want the 20-day EMA, the bear trendline, or the October 24 high to act as resistance.
  • Bears must create strong consecutive bear bars breaking below the October low to increase the odds of another strong leg down.
  • The market remains in a large trading range.
  • Traders will continue to Buy Low, Sell High until there is a clear breakout in either direction with sustained follow-through.
  • That means buying near the lower third and selling near the upper third of the trading range.
  • The retest of the October low over the past four weeks has overlapping ranges, indicating the bears are not yet decisively strong.
  • The market is currently near the lower third of the trading range, which can act as the buy zone for trading-range buyers.
  • For now, traders will watch whether bears can create more follow-through selling and break below the October low.
  • Or will the market stall around the October low area and move toward a retest of the October 24 high instead?
  • Poor follow-through and frequent reversals remain hallmarks of a trading range.

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