Hi MMG...yes, a falling wedge is a sign of a reversal, but a reversal for how long? In this case, I would consider it a short term reversal. I suspect according to the chart that oil will test the 130-133 range one more time, and then fall down below the 120 level test support again. I am basing this on the previous black vertical line that I drew in the $wtic chart in Jan.
On most charts, the beginning of a run will have a steep upgrade. Then it will retrace to support or consolidate and run again (often in 2 or 3 waves). At the top of the run, there will often be a double top. If the price cannot break through previous resistance (usually correlated with high volume), then it rolls over into a downward channel. The momentum indicators like the rsi/williams/sto/macd are good indicators for telling this. When they break through the upper half (50 line), then the trend will often break down or consolidate. There will still be oversold pops along the way (like now).
With all of that being said, news can trump the chart and with oil, there is plenty of that. lol
Here is another chart that trades on oil. Just for education purposes, see how much selling volume there was when oil didn't break through the double top resistance at 119.00?
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