A flag pattern is characterized by a sharp countertrend (the flag) succeeding a short-lived trend (the flag pole). the legendary investor W.D. Gann described the formation as “a continuation of the Twiggs Money Flow method of following a primary trend to identify reversals in trends or leads to important turning points. Flag pattern breakouts are often preceded by a steady move in one direction. After the price level has nearly reached a significant resistance, this rally forms a peak or extreme that serves as the “flag pole.” The price action usually pauses, or consolidates during which the market reaches its highest point, or resistance (the flag). After this consolidation, the sides of the flag will form trend lines toward an impending breakout. Reversals take place when the price breaks downward through one of these trend lines and closes through the bottom.
Crude oil trend today suggests, MCX crude oil is forming “Ascending broadening wedge” pattern in four hours time frame. Crude oil is currently trading lower with 5-SMA & 10-SMA in the bearish cross. Hence, it is recommended to sell crude oil above 5950 with SL around 6000 for the target of 5890&5820 and stop loss below 5980 for the objective of 5950 & 6030.
Crude oil prices are slipping lower, and a big wedge pattern has formed on the daily chart of oil. Based on the most recent price action in mid-November 2015, oil looks headed for the 6050 level next, which is a key support level. We don’t have any reasons to believe that prices will turn around anytime soon, so it’s ok to trade with the bearish trend.
Crude oil continues to trade in a bearish trend, after indecision seen till recently. Price action has struggled near 6050 level, and got rejected by the downward trend line of the “Ascending broadening wedge”. While few sessions are in sideway rallies with correction, today it closed down. As per the technical aspects based on the current price action, we expect further downside rally, once the same break below 6050. The downside rally may be testing all the way up to 5940-5980 levels in coming sessions. In any case, 6120 resistance holds key, while 5990-5990-5992 support cluster holds as alternative target. The crude oil trend today is bearish as per MCX chart. The dips seen in the recent days have been traded in a sideway manner (sideways), with few sharp up and down moves. The last correction today has taken the price down to 6050-6040 levels, which served as a key support level. A break above this level will change the trend back towards bullish mode.
Our technical chart analysis predicts that the price of crude oil will likely continue to fall, given its most recent upward climb. The market is showing signs of a strong buying frenzy; however, the latest trend is favor of any downtrend. The crude oil, or petroleum, markets are the most volatile financial markets open to traders. Under a variety of market conditions, traders can make large profits by trading oil futures.