FxWirePro: Crude forms whipsaws with streaks of bearish patterns, consolidation phase breaks-out symmetric triangle resistance – Tunnel spreads to speculate

The uptrend goes in whipsaws pattern (refer rectangular shaped area), Shooting star & gravestone doji have occurred at $57.22 and $57.24 levels respectively to signal weakness. Consequently, the prices have plummeted that goes below 7DMA levels.

For now, more slumps on cards upon a break below strong support at 7DMA.

The current crude prices have been showing downside momentum after the formation of these bearish pattern candles.

After the stern streaks of bullish rallies, the price behavior now seems to be forming whipsaws pattern (refer rectangular area on 4H chart).

RSI displays the overbought pressures by showing downward convergence to the mild price declines. While stochastic curves have been indecisive but bearish bias alerting with overbought pressures.

To substantiate the prevailing weakness, MACD signals a potential uptrend reversal briefly.

But on the flip side, it’s been quite puzzling from the broader perspective. The consolidation phase from last more than a year or so, one could very well figure out that every attempt of upswing has shown the failure swings as and when it approaches symmetric triangle resistance. But the bulls have managed to break-out this level (the major trend breaks symmetric triangle resistance, refer monthly chart).

As a result, the current prices spike above EMAs but another major resistance at $60.10 is observed.

Thus, contemplating above technical rationale, on speculative grounds we advocate tunnel spreads using upper strikes at $56.88 and lower strikes at $56.34 levels.

The trading between these strikes likely to derive certain yields and more importantly these yields are exponential from spot movements.