CRUDE closes lower for the 2nd day in a row
Crude Oil (CRUDE) Technical Analysis Report for Oct 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CRUDE finished the week 0.56% higher at 41.03 after edging lower $0.17 (-0.41%) today on low volume. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (CRUDE as at Oct 16, 2020):
Friday's trading range has been $0.96 (2.33%), that's far below the last trading month's daily average range of $1.62. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CRUDE. Prices continued to consolidate within a tight trading range between 39.32 and 41.57 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Hanging Man which are both known as bearish patterns.
After trading down to 40.34 earlier during the day, the contract bounced off the key technical support level at 40.75 (S1). The failure to close below the support could increase that levels importance as support going forward. Oil closed back below the 50-day moving average at 41.08. When this moving average was crossed below the last time on October 9th, CRUDE lost -2.52% on the following trading day.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying might accelerate should prices move above the close-by swing high at 41.57 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 39.50 where further sell stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Oil. Out of 63 times, CRUDE closed higher 55.56% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after six trading days, showing a win rate of 63.49% with an average market move of 0.26%.
With five out of the other seven Commodity Markets closing lower today, the ones that stand out on the negative side are NATGAS losing -2.83% and COFFEE closing -2.45% lower. On the flipside the best performers have been SUGAR closing 1.76% higher and WHEAT gaining 1.16%. Read more