Market Overview: Crude Oil Futures
The weekly Crude oil bears want a breakout below the triangle and the 20-week EMA. If the market breaks below the triangle, bulls hope the bottom of the trading range around the March 10 low provides support.
Crude oil futures
The Weekly crude oil chart
- This week formed a bear bar closing near its low, testing the bottom of the triangle and the 20-week EMA.
- Last week, we said traders would watch whether bears could generate a second leg sideways to down, breaking below the bottom of the triangle and the 20-week EMA, or whether the market would stall and test the top of the triangle instead.
- Bulls see the current move as a pullback forming a large double bottom bull flag (April 17 and June 12).
- Bulls want any pullback to form a higher low relative to the April 17 low and hope the 20-week EMA acts as support.
- If the market breaks below the triangle, bulls hope the bottom of the trading range around the March 10 low provides support.
- Bulls need consecutive bull bars closing near their highs and breaking above the triangle to increase the odds of trend resumption.
- Bears want a reversal from a wedge top (April 7, April 30, and May 18) and a lower high major trend reversal.
- Bears wanted a second leg sideways to down following the first leg down from May 18 to May 29. They got it this week.
- Next, bears want a strong breakout below the triangle and the 20-week EMA.
- Bears need to create strong consecutive bear bars to increase the odds of a reversal.
- Crude oil is formed a broad contracting triangle, with the market contained within two converging trend lines.
- The trading range is becoming tight, placing the market in breakout mode. Traders expect a breakout within a few weeks. The first breakout can fail about half the time.
- 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 of the range—until there is a strong breakout with follow-through.
- The middle of the range is an area of balance and can act as a magnet.
- Traders will watch whether bears can generate follow-through bear bars breaking below the bottom of the triangle and the 20-week EMA.
- Or whether the market trades lower but finds support near the April 17 or March 10 lows.
- 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 down this week, with the 20-day EMA acting as resistance.
- Last week, we said traders would watch whether bears could generate follow-through selling, breaking below the bottom of the triangle, or whether the market would stall and test the top of the triangle instead.
- Bulls see the current move as a pullback forming a large double bottom bull flag (April 17 and June 12) and a smaller double bottom bull flag (May 29 and June 12).
- Bulls want the April 17 low to act as support.
- If the market trades lower, bulls want the March 10 low area to provide support.
- Bulls need consecutive bull bars closing near their highs and breaking above the triangle to increase the odds of trend resumption.
- Bears want a reversal from a wedge top (April 7, April 30, and May 18) and a double top bear flag (April 30 and May 18).
- Bears want a strong breakout below the triangle and need sustained follow-through selling to increase the odds of a reversal.
- If the market trades higher, bears want the 20-day EMA or the June 3 high to act as resistance, forming another lower high and a double top bear flag.
- Crude oil is forming a triangle with an increasingly tight trading range, placing the market in breakout mode. Traders expect a breakout within a few weeks. The first breakout can fail about half the time.
- 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 of the range—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 bears can generate a strong breakout below the triangle with sustained follow-through selling.
- Or whether the market trades lower but finds support near the April 17 or March 10 lows instead.
- External factors, such as developments in the Middle East, could accelerate or reverse the current move.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
