Momentum Oil Technical Analysis & Momentum Trading Signals

The Moving Average Envelopes indicator creates two lines around the crude trading price forming a channel. The upper and lower channel lines are drawn at an equidistant level above and below the MA. The distance to draw the envelopes is calculated using a percent or a number of pips.

Moving Average Envelope

Oil Technical Analysis & How to Generate Crude Trading Signals

MA Envelope can be traded using several different rules. Main technique of generating oil trading signals is to use the crude oil price penetrating the upper channel or lower channel.

Bullish Trading Signal

Oil Price penetrating the upper channel is a long buy oil signal.

Buy Crude Trading Signal

Bearish Trading Signal

Oil Price penetrating the lower channel is a short sell oil signal.

Sell Crude Trading Signal

In a trending market the MA points upwards in an up oil trend market or downwards in a down oil trending market. It is good to use the envelopes together with other indicators such as oil trendlines so as to confirm the signals generated.