The main issue on this chart is that prices are now below the upward sloping trendline that started earlier this year. Also note that prices are in a "lower highs" situation. Finally, prices and the EMAs are bunched together with no clear direction.


This is a great example of a pennant pattern. Notice how prices starting falling at the end of June followed by a counter-rally in July. But now prices have moved through the lower trend line and have moved through the EMAs.

Let's take a look at the fundamental picture.


Even though inventories have been decreasing, oil inventories are still above historical norms.


Gas demand has picked up leading to

higher prices.