Crude Oil:-Potential double top pattern has formed

Sep 13 , 2018

 

From past couple of days we can see too many volatile sessions in the crude oil and we have witnessed many roller coster rides. Well during the tug of war between bulls and bears we are expecting bearish movement in near term. The current set up has been constructed for double top pattern where yesterday we have seen shooting star candlestick which is a bearish reversal pattern.

 

From technical prospective a bearish divergence on the daily chart from RSI is providing us bearish signal and it’s a leading indicator and a downtrend line on the daily technical chart is providing us bearish signal and supporting the bears. On contrary a pullback rally above $70 level will negate the bearish momentum but sustain above $70 level need to be compulsory.

 

 

 

 

From the long term prospective crude oil is trading in a perfect downtrend and bears are making successively lower lows and lower highs on the daily chart even they marked a low of $64.40 level but after that we have seen a correction or we can say that profit booking. From last couple of trading sessions we are witnessing some bullish sentiments and bulls made a counter attack towards north side. They made a high of $71.36 but could not sustain at that level and slipped to downside with the formation of shooting star.

 

 

By applying the fibonacci retracement line from $75 to $64.40 level we have seen that crude has retraced almost 61.8% level and turned downside from that level. A shooting start candlestick followed by a bearish marabuzo candlesticks are generating bearish signal. The current picture indicates that it’s an another opportunity to sell again and we will get further confirmation once it trades and settles below the 67.50 level. A daily closing below the 67.50 level will open the way towards the 66 and 65 level in near term.

 

 

The $65 is the immediate support level followed by $63 whereas $71 is immediate resistance followed by $73 level.A bearish divergance of RSI on the daily chart is also generating trend reversal signal and MACD indicator also given a fresh bearish crossover the chart which is a recent development.

 

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