Alessio throughout's Technical Analysis of Crude Oil After Middle East Conflict
Technical analyst Alessio throughout examines crude oil charts following the Iran war, arguing that extreme overbought conditions suggest an imminent top despite ongoing geopolitical tensions.
Summary
Alessio throughout provides a technical analysis of crude oil prices following the Iran conflict in March 2026. He argues that while geopolitical concerns have driven oil past $100 per barrel, the charts show extreme overbought conditions through "acceleration extremes" — technical indicators that have historically preceded major tops and sharp corrections. He presents examples from 2022, 1996, and 1990 where similar technical patterns led to significant price drops. Alessio throughout contends that fundamentals lag price action and that crude oil will likely top in coming weeks or months, eventually falling back below $80 despite the ongoing Iran war. He notes that the energy stocks ETF (XLE) has not confirmed oil's rally, further supporting his bearish outlook.
Key Takeaways
FULL TRANSCRIPT
Opening Remarks on Oil Price Concerns
Alessio throughout: Hey guys, Alessio throughout. Hope you're well. So in this video, I want to talk to you about something many have been asking me about, which is the price of crude oil. As we've seen, crude oil prices have skyrocketed, especially in the wake of what's happening in the Middle East with the Iran war. Obviously, a lot of people are quite worried and they've been asking what could happen to the price of crude. Are we going to be in the middle of a crisis, perhaps even with gas prices likely soaring? What are the charts of crude oil telling us? We'll have a look at these important charts. Join me.
Welcome back. Speaking today from Alanya in Turkey. Beautiful place, by the way. About crude oil. Now certainly as I'm making this video about crude oil, as I'm sure you probably know, in the major news headlines, we have the Iran war and of course news about the Straits of Hormuz in the Middle East.
The Danger of Correlating News with Price Action
Alessio throughout: Let's talk about this. First of all, let me say that I think it's a dangerous mistake to often correlate what's happening in the news with what's happening on the price charts, for example, the price of crude oil. I know this makes common sense and a lot of people unfortunately still think that prices, or for example crude oil prices or the price of anything actually in the markets, has to follow some kind of logical common sense. That's the general approach that a lot of people have about the markets and unfortunately it's wrong. It is incorrect.
In fact, there have been several studies that have shown that news has very little to do with what's actually going on on the price charts or the charts of any market. Actually, often what usually happens is against common sense and against logic. Even though it's very easy at the moment to look at the chart of crude oil and say "Ah, okay, the price is skyrocketing because of the Iran war." Certainly, listen, I'm not saying that uncertainties and worries about what's happening in the Middle East have nothing to do with it. I think that investors in general are worried and have concerns about what's happening in the Middle East and potentially with regard to the price of crude oil. I do think there's a general fear and panic which is behind the sentiment with regards crude oil.
As we know, price is driven by sentiment, by fear, greed, optimism and pessimism, not so much the news itself. That is why the price of a market or commodity often has very little to do with what's going on in the news.
Technical Analysis Over Fundamentals
Alessio throughout: What I want to focus on is looking at the chart of crude oil from a technical perspective, not a fundamentals perspective. Because as we know, fundamentals lag price. We have to remember that doing analysis by looking at fundamentals is often like driving but only looking at the rearview mirror. I really think that it's important to look at what the charts are telling us.
As you can see here, the chart of crude oil has skyrocketed and went over $100 a barrel extremely fast. Crude oil broke out of those trend lines that we have there, the channel, and went very quickly to about $100 and actually went over $100 a barrel.
Here's the thing. Because crude oil prices became parabolic, they also went too far too fast. What's happened is, as you can see on the chart, crude oil has now triggered what's called an acceleration extreme. Not just any acceleration extreme, but red and purple acceleration extremes. We changed the settings to strict. You can see that on the strict setting of the acceleration extreme indicator, we have a red acceleration extreme. This shows extremely overstretched overbought conditions on the price of crude oil.
Historical Patterns: 2022 Example
Alessio throughout: Here's the thing. You're probably wondering, well, okay, so what? If you look at previous times when crude oil has triggered these extreme accelerations, these extreme overbought, overstretched conditions, you will see what crude oil has done afterwards.
For example, the last time this triggered was in 2022. In the spring of 2022, we had the price of crude oil skyrocketing, went up very fast. But look at this. We had extreme acceleration. We had red and purple acceleration extremes. Notice what happened. Then the price of crude oil pretty much made a top and then dropped quite sharply. It actually had a major pullback and actually over the course of time, it then gradually declined further. It did not actually go much higher than that and as a matter of fact, formed the top right there.
Historical Patterns: 1996 Example
Alessio throughout: Here's another example for you from the year 1996. Again, the price of crude oil rallied strongly. We had red and purple acceleration extremes again showing extreme overbought conditions. Look at this. Then the price of crude oil pretty much made the top and then dropped quite sharply. As a matter of fact, it dropped back to the averages and declined in double-digit percentages. A very swift and very sharp drop in the price of crude.
Historical Patterns: 1990 Examples
Alessio throughout: The one before that, you can see a couple of examples in the year 1990. In the year 1990, the first time that occurred, again acceleration extremes occurred on the price of crude oil, and then pretty much oil then topped there and then dropped quite sharply back to its averages.
There are some other examples in the year 1990. I want to show you here. The first couple of times when the acceleration extreme occurred, oil made a slight pullback but then continued to rally further higher. But look at this. The next time that the price of crude went up and then triggered an acceleration extreme, you can see it formed a top. Pretty much it then dropped quite sharply back down to its averages.
Looking at these examples, we can see that in previous times in history when the price of crude oil has skyrocketed, has become parabolic and triggered acceleration extremes — again 2022, 1996 and 1990 several times — we can see a general pattern that the price of crude oil pretty much soon afterwards makes a top. In other words, becomes extremely overstretched, overbought, and then it drops back down usually in double-digit percentages back to its averages and sometimes it forms a long-term top as well.
Current Situation and "This Time Is Different" Fallacy
Alessio throughout: We can see right now we have a very similar situation. I know some people are going to say, well, this time is different because of the Iran war and things like that. The fact is, in previous occasions too, people have always said this time is different and it wasn't. We have to be very cautious when people say "Oh, this time is different because of so and so reasons." No, we need to remain as objective as possible.
Given the extreme overbought conditions, overstretched conditions with acceleration extremes as we can see here right now in 2026, as I'm making this in March of 2026, with oil also reaching resistance and again becoming extremely overstretched, overbought, parabolic with extreme acceleration readings, I think the probabilities are quite high that we could see some kind of a top forming in the next several weeks and months.
This doesn't have to happen immediately. It is possible for bulls to push this a bit further higher, but I think we need to watch the price of crude oil very carefully.
Key Support Level to Watch
Alessio throughout: If oil can break down below this support at 76.73, it would significantly increase the probability of a top in the price of crude oil and then a drop back to its averages. This has not happened as yet, but I think it could potentially happen in the next several weeks and months.
By the way, this video is by no means a recommendation to sell or short or buy into crude oil. This video is purely for educational purposes. All I want to do is shed some light on what's going on on the chart of crude oil. To me, based on what I'm seeing here, I think this particular rally has run its course. I think there are strong indications here on oil that we could be reaching a likely top in the next several weeks and months. Even if it continues to push a bit further higher, I think this rally is going to be temporary.
Outlook on Iran War and Price Leading News
Alessio throughout: About the Iran war, I think that also is more likely to be temporary as well. I don't think the situation with the Iran war is going to continue for a very long time. I think it's going to be temporary. I think the price of crude oil is likely to top in the next several weeks and months before any major news comes out about Iran, before some potential positive news comes out. Because as we know, price often moves ahead of the news. Again, fundamentals are usually lagging.
XLE Non-Confirmation
Alessio throughout: By the way, there's one other thing which makes me cautious, which is that XLE, the energy or oil stocks ETF, this chart has not confirmed the recent rally we've seen in the price of crude oil. Whereas oil has continued to skyrocket higher, XLE as a matter of fact has not confirmed that. It has pulled back and dropped. That non-confirmation on the chart of XLE should make us cautious here.
Summary and Conclusion
Alessio throughout: In a nutshell, I think that in the next several months, we're going to see the price of crude oil eventually dropping back down below $80 and likely dropping back down to its averages. As mentioned, oil has to break down below this recent low, this recent support at 76.73, to increase the probability that a top has formed.
I don't think this particular rally is going to continue for too long. I think it's a short-term rally and I think in the next several weeks and months we're going to see a top, potentially a long-term top or a medium-term top in the price of crude, which means that even if fuel prices or gas prices go up in the short term, I don't think it's going to last too long. I think fuel prices and gas prices eventually will drop back down by the end of this year to lower prices. Once crude oil breaks support, then the odds increase for some kind of pullback correction and indeed a major drop down.