Brent's Hidden 'Triple Top' Warns the Oil Rally May Have Run Out of Gas

Brent crude settled down 1.7% at $113.88 a barrel on Tuesday, and a widely watched momentum indicator says the recent rally may be exhausted. The Relative Strength Index has formed what chart analysts call a triple top — a pattern that historically warns of trend reversal.

Brent has climbed steadily over the past few months, approaching the highs that followed the start of the U.S.-Iran war as traders worried the conflict would escalate. But RSI hasn't kept pace with price. That divergence, according to Dow Jones Market Data, is the market's tell that momentum has swung to the seller's side.

The numbers tell the story. When prices spiked in mid-July, RSI peaked at a four-month high of 75.54 on July 23 — above the 70 level that technicians read as overbought. A second RSI peak came in slightly higher at 76.35, but the follow-through was weak: a second rally attempt stopped at 73.01 on Sept. 15, even as the Sept. 15 settlement of $108.75 a barrel sat 1% above the Sept. 10 close.

Then came the clearest signal. By Oct. 23, price had reached about 16% above the Sept. 15 high, yet RSI peaked at just 74.61 — below even the July 23 reading. RSI making a lower high while price makes a much higher high is the classic bearish divergence. And as prices have pulled back from Friday's peak, RSI has fallen even faster, a sign sellers now have momentum behind them.

Brent has lost 2.4% since closing at a six-month high of $116.72 on Friday.

What does this change for oil traders?

Not the trade itself — the timing. The source is explicit that RSI signals are warnings, not buy or sell triggers. The current signal says don't buy this week's dip. The actual sell signal has to come from a breakdown in price, and that hasn't happened yet. At minimum, RSI is saying there's no reason to rush in at current levels.

For practitioners, three price levels now matter:

• $104.40: the trendline off the early July low, which extended to roughly that level on Tuesday, per FactSet — about 4.6% below current prices and rising just under 30 cents a day. A break below it is the first price sign the trend has changed.
• $96.16: the Sept. 29 close. Falling below it creates a lower low, the first half of the lower-lows-and-lower-highs pattern that defines a downtrend.
• $116.72: the Oct. 23 high. A bounce that fails to reclaim it would seal the bearish pattern.

Watch RSI too. A drop below its Sept. 29 print of 46.60 would complete the same lower-low, lower-high structure on the momentum side.

Why price must confirm the signal

It may seem premature to call the sellers in control. The price gains have looked strong, and they're backed by actual supply constraints. But RSI can detect subtle shifts in behavior that aren't obvious when you're only watching price. That's precisely its value here — the deterioration showed up in momentum weeks before anything showed up on the price chart.

The bearish case isn't locked in, though. To wipe away the negative behaviors entirely, prices would need to make a fresh high above $116.72. And how RSI behaves at that moment would matter just as much as the price print itself.

Until one of those triggers hits, the working read for traders is simple: the rally's engine is sputtering, but the trend line — literally, at $104.40 — hasn't broken yet.