Crude’s Rising Wedge Reappears
Abigail Doolittle | Apr 03, 2012 03:29AM ET
Five months after the possibility first appeared, it now seems plausible that crude’s bearish Rising Wedge may try to fulfill.
As shown by the unaltered chart above that was marked up weeks ago, it does seem that crude is trying to make a confirmation attempt and something that could happen safely with a potential drop below $95.44/barrel.
Early signs of that confirmation came last week with crude’s breach of support around $103.78/barrel while a possible decline below about $101/barrel would strongly signal that crude will make an actual attempt to confirm its bearish Rising Wedge pattern with a target of $75/barrel.
In looking at crude’s weekly chart below, it seems that pattern’s confirmation and some form of fulfillment may be near.
Specifically, crude was unable to take out long-term resistance found in the top trendline of that Ascending Trend Channel and it now appears likely to drop into the intermediate-term Descending Trend Channel as a confirmed weekly Pipe Top from late February into early March tries to hit its approximate target of $98/barrel.
Unless crude can rise back above $108.25/barrel, it is this Pipe Top that is likely to carry crude down toward confirming that Rising Wedge and a pattern that will try to take crude toward or below $80/barrel should it confirm safely.
After last week’s trading, then, crude is less at a crossroads and more on a bearish path as crude’s Rising Wedge reappears.
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