The Ascending Triangle in Crude Oil Daily

Sep 21, 2009: 9:59 AM CST

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

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

8 Comments

8 Responses to “The Ascending Triangle in Crude Oil Daily”

  1. brophy Says:

    Corey: You could also draw an inverted Head and Shoulders.
    Steve B
    NYC
    Love your work by the way!

  2. Corey Rosenbloom, CMT Says:

    Steve,

    Good point! It's not quite as symmetrical as gold's Inverted H&S, so I'd lean initially against calling it that for the moment as the pattern seems to be consolidating/converging into more of the triangle variety than the H&S but it very well could be.

    As is the criticism with Gold's Inverted H&S, generally those patterns form at bottoms, not tops, so for now the ascending triangle seems to be the dominant pattern.

  3. The Symmetrical Triangle in Exxon Mobil XOM | Afraid to Trade.com Blog Says:

    […] in Exxon Mobil XOM Sep 21, 2009: 1:35 PM CST // I mentioned earlier this morning that an “Ascending Triangle” was forming in Crude Oil prices (daily), but there’s been an even larger triangle forming on the price charts of […]

  4. The Symmetrical Triangle in Exxon Mobil XOM | Penny Stock Trading System Blog Says:

    […] mentioned earlier this morning that an “Ascending Triangle” was forming in Crude Oil prices (daily), but there’s been an even larger triangle forming on the price charts of […]

  5. ETF FOOL Says:

    […] eyes on the ascending triangle in […]

  6. Viewing the Recent Breakdown in Oil and Rally in the Dollar | Afraid to Trade.com Blog Says:

    […] Viewing the Recent Breakdown in Oil and Rally in the Dollar Sep 24, 2009: 4:20 PM CST // Let’s take a quick look at the daily charts of Crude Oil and the US Dollar Index as of September 24th, particularly with regard to oil’s breakdown from the ascending triangle as described in a prior post. […]

  7. Viewing the Recent Breakdown in Oil and Rally in the Dollar | Penny Stock Trading System Blog Says:

    […] Let’s take a quick look at the daily charts of Crude Oil and the US Dollar Index as of September 24th, particularly with regard to oil’s breakdown from the ascending triangle as described in a prior post. […]

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