E Crude Oil Suggests A Reversal Down

Hello traders!

Crude oil is making a recovery from a minor triangle correction located in a sub-wave b), which means prices can still climb higher within a wave five of an Elliott wave ending diagonal, and can later stop at $44.00.

Crude oil, 1h

On the daily chart of Crude oil we see energy in a strong recovery, up from 7.08 lows, which can be part of a bigger, bullish reversal. We see a higher degree wave A)/1) which can be in final stages with its structure, and can look for resistance, and a reversal into a wave B)/2) correction at the $44.0 level.

The relative strength index below the chart also suggests resistance and a reversal in days ahead.

Crude oil, Daily

An ending diagonal is a special type of pattern that occurs at times when the preceding move has gone too far too fast, as Elliott put it. A very small percentage of ending diagonals appear in the C wave position of A-B-C formations. In double or triple threes, they appear only as the final C wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement.

Ending diagonal in an uptrend:

 

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