Elliott Wave Analysis: WTI Crude Oil Commodity


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WTI: bullish correction could advance further

Function - Counter-trend

Mode - Corrective

Structure - Zigzag

Position - Black wave X of higher degree red wave (B). Blue sub-wave a of Y is complete

Direction - Black wave Y of higher degree red wave (B). Blue sub-wave b of Y is in progress

On the daily timeframe, WTI oil has completed a bearish impulse wave labeled as red wave (A), with wave (B) currently underway. These waves are part of a larger degree correction, responding to the completion of blue wave X (circled) at 94.5 in September 2023. The anticipated red wave (C) is expected to take the commodity lower than previous lows at 67.8 and 64.5. Confirmation of completion for red wave (B) is crucial before further analysis.

Zooming in on the 4-hour timeframe, a double zigzag pattern from 67.81 indicates red wave (B) development. Sub-wave W-X concluded at 71.39, followed by a bullish move towards 79. The current surge likely represents the blue sub-wave ‘a’ of black wave Y within red wave (B). However, validation requires the completion of corrective blue wave b, potentially finding support in the 74.25-75.53 demand zone.

For a bullish trade setup, it's essential to monitor the validity of this corrective pattern, with a break below 71.39 signaling invalidation. If the bullish correction holds, further upward movement towards 84 for WTI crude can be expected.

In summary, WTI price action suggests a bullish corrective phase in a larger bearish corrective cycle is in progress for WTI oil, with red wave (B) completing the bullish corrective phase. Confirmation of the completion of red wave (B) is crucial for determining the next long-term directional bias. However, swing and short-term traders can look for trading opportunities in the direction of wave (B) until it completes. Also, traders should closely monitor price action and key support levels on both the daily and 4-hour timeframes to capitalize on potential trading opportunities while managing risk effectively.

Technical Analyst : Sanmi Adeagbot

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Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817

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