Today will bring some clarification about whether yesterday's moves in bond and stock markets will continue the same way. When it comes to data there is not much on the agenda that potentially could influence markets strongly.
Article / 09 August 2016 at 10:12 GMT

Oil bullish? That's what the chart's suggesting

Technical Analyst / FuturesTechs
United Kingdom
  • Oil pullback may have ended
  • Fundamentals fans are skewed bearish
  • Charts usually win when fundamentals disagree
 Oil was tipped to sink to $20 earlier this year, but this didn't happen. Pic: iStock

By Clive Lambert

I was away for two weeks and returned yesterday. My job is to look at charts, and one of the things that grabbed me yesterday was the recovery in oil prices seen last week.

One thing I did say to clients yesterday was that this pullback had actually gone "deeper" than I expected. But the key word in that last sentence is "pullback" as this is what this appears to be, and it may have ended.

Another thing I’d say is that upon my return everything I've read from the "fundamental brigade" on oil markets seems to be talking the bear skew. To be honest I'm absolutely fine with this. If the charts say something different to the fundamental consensus the charts usually win. Just think back to earlier in the year when oil was going to $20... Except it didn't!

So let’s stick to what I (allegedly!) do best and take a look at the charts, and see what they say about the potential future direction for the Brent and WTI contracts.

Last Tuesday and Wednesday Brent was nudging $41.50, but a strong recovery since has seen downtrend resistance broken and now we’re testing a key Fibonacci resistance at $45.82.
A move above $45.82 is likely to trigger further short covering/buying, the next target being $48.50 before we’re thinking about levels like $50.50, $51.50 and $52.80.

A look at the weekly hints that the recent pullback might just be forming the right shoulder of a Head and Shoulders bottom but this scenario is a while away from being something to get too excited about as the neckline (the level that would need to break to give a buy signal) is up at $52.50 at present.

Chart 1: Daily Candlestick – Brent Crude (front month continuation)

Brent Daily

Chart 2: Weekly Candlestick – Brent Crude (front month continuation)

Brent Weekly
The WTI chart is also nicely of the bottom from last week. We posted a “Hammer” reversal last week and today we’re trying to sustain a bid above the channel resistance line you can see on the daily chart. This is at $42.63 today and it’s the bulls’ mission to keep us above here today so we can gun for $44.00 then $47.00. It’s so far so good on this front but the day is young. 

As with the Brent chart the bigger picture weekly chart is also hinting at a possible H&S bottom formation, but as with Brent we’re a while away from this being a reality and one should always guard against getting carried away with these ideas before the signal is given. The neckline on this chart is right up at $51.86.

Chart 3: Daily Candlestick – WTI (US) Crude (front month continuation)

WTI Daily

Chart 4: Weekly Candlestick – WTI (US) Crude (front month continuation)

WTI Weekly
– Edited by Clare MacCarthy
Clive Lambert is chief technical analyst at FuturesTechs
11 August
Clive Lambert - FuturesTechs Clive Lambert - FuturesTechs
43.50 is an important support for Brent Crude and has held this morning. Looking to see if we get a "proper" reaction now.
16 August
Clive Lambert - FuturesTechs Clive Lambert - FuturesTechs
We have seen continued upside in Oil markets since I wrote this and Brent Crude has now hit that 48.50 target.
16 August
Clive Lambert - FuturesTechs Clive Lambert - FuturesTechs
WTI has hit the 44.00 target suggested and is now gunning for the next upside target at 47.00.
All looking good for the bulls with little sign of sellers returning for now.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail