The Ascending Triangle in Crude Oil Daily

Not to be outdone by gold’s lengthy triangle price pattern, Crude Oil has recently been forming its own triangle pattern as seen on the daily chart.  Let’s take a look and note the current triangle boundaries.

This chart was taken as of this weekend and the index in StockCharts.com (for $WTIC) updates “end-of-day,” and as of this writing, crude oil futures are trading at the $70 per barrel level, so we’ve had some downward movement since this chart was created as part of this week’s 21 page “Intermarket Technical Report“.

The $70 area contains the lower trendline along with the rising 50 day EMA ($69.44) so keep a close eye on these levels for possible support.

The upper line of the triangle resides at the $75 level, which reflects the 200 week simple moving average (weekly chart) which has served almost like ceiling so far on price.

A negative momentum divergence has formed as price has wound its way to new marginal 2009 highs, so that is a bearish non-confirmation that has developed.

The obvious play would be to wait for some sort of price breakout – above $75 (target $80) or beneath $70 (target $60) to play for a ‘range expansion’ or ‘triangle break’ move instead of trying to predict in which direction the price expansion will occur.

Reference gold’s price quick expansion move when it broke above the daily symmetrical triangle in the last few weeks that set up a quick scalp trade for those nimble enough to play the breakout move.

For now, keep your eye on a break above $75 or a clean break beneath $70 in crude oil for a potential breakout play from the dominant triangle pattern.

To keep up with the Monthly, Weekly, and Daily structure and opportunities in 10-Year Notes (Bonds), S&P 500, Gold, Crude Oil, and the US Dollar, subscribe to our new Premium “Weekly Intermarket Technical Report” (released each Sunday evening for the week ahead).

Corey Rosenbloom, CMT
Afraid to Trade.com

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