Crude Oil double topped in late 2018, then it fell nearly 50% in 90-days, taking stocks along with it. Could Crude be “Double Topping” again? Let’s investigate what the chart is showing us.
Crude oil created a weekly Doji Star topping pattern at (1) in the summer of 2018. A few months later it then created a bearish reversal pattern at the same level as the Doji Star pattern, forming a double top.
Right after the double top, Crude experienced massive selling pressure driving the price down nearly 50% in 90-days. What did stocks do during this large Crude decline? The S&P fell nearly 20% in 90-days.
Crude looks to have created another Doji star topping pattern at (2) this past April. The rally over the past few months has Crude testing the “Doji Star” level, as well as, it’s 61% Fibonacci retracement level at (3).
Could it be creating a bearish reversal pattern?
If Crude is double topping, will it experience another 50% decline similar to 2018? If there is another large price drop, will it impact stocks again?
We will be keeping members keenly aware of what Crude does the next few weeks and what strategies should be implemented should further weakness or a breakout in Crude take place.