December 8, 2013 in Crude Oil
Crude Oil Price Technical Analysis – 08 Dec 2013
First up in this Crude Oil price technical analysis is the weekly chart. This chart highlights the two major support resistance zones that is active in the near term. The red horizontal bar is the resistance for further upside and the green bar shows the support to the downside.
Crude oil price rebounded strongly from the green support zone and has come back into the red resistance area. This could be a beginning of a new bullish trend or it could also be just a rebound off the lows.
Next up in this crude oil price technical analysis, we take a look at the daily price chart to determine the character of the bounce.
As you can see, the crude oil price slide paused right above the green support area. It bounced off this area a few times before finally pushing higher in a strong bullish candlestick. The price has now stalled just below the red resistance area.
There is clear gap at 97.77 to 98.20 which is still open. Although the price went into this area in intraday price activity, it has not managed to close above it. The crude oil has put in a few doji type of candlesticks at this level which indicate indecision.
From an Elliott wave perspective, this strong push higher in price could be the final wave c of a flat or the first wave of a new trend. As you know, wave c of a flat is either an impulsive five wave structure or an ending diagonal. A lot of times, traders mistake this for the first wave of a new trend and get caught on the wrong side.
As mentioned, it could also be the first wave up of a new trend. There is a need for a few more price bars to be put in place in order to tell with a high degree of confidence whether the trend has change or not. So far, the price action at the gap shows that the bias is still bearish.
If the trend has indeed changed, the next few bars would be short, choppy and slide slowly to the downside forming a bull flag. On the other hand, if the price action moves strongly to the downside, it would signal continuation of the downtrend in crude oil price. This is what we are anticipating.
Crude oil price technical analysis is pointing to a resistance area with a bearish bias. The way the price action behaves at this area will determine the prices going forward.