Elliott Wave Technical Analysis: WTI Crude Oil - Thursday, March 7


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WTI Crude Elliott wave analysis - when will the corrective rally end?

Function - Counter-trend

Mode - Corrective

Structure - Diagonal

Position - Blue wave a of Y of (B)

Direction - Blue wave b of Y of (B)

WTI Crude has gained over 16% since mid-December. However, the resurgence has been corrective. Thus, the buyers need to know likely price levels where massive selling might begin to begin the bearish trend that dominated between September and December 2023. In the Elliott wave analysis, we want to investigate the nature of the corrective drive, how far it could go, and likely terminal areas where it could end.

On the daily time frame, the $95 top realized in late September completed a primary degree wave X with an expanding flat pattern. This means that 95 marked the top of the 2nd leg of a double zigzag pattern of the primary degree. Therefore, we anticipated from 95, the last leg - primary degree wave Y. Price action since 95 has been in support of this forecast with wave (A) of Y completing a bearish impulse wave down to 67.81. The bullish corrective response is developing into a double zigzag wave (B) of Y. Eventually, when it completes, wave (C) will favor downward moves below $60. In a nutshell, that’s a reasonable medium-term Elliott wave forecast for WTI crude. However, it doesn’t look like wave (B) has been completed yet. Therefore, we need some investigation of the developing double zigzag corrective rally on the 4-hour chart.

On the H4 chart, minor degree waves W and X of (B) have completed. Wave Y, which is expected to be a zigzag pattern, is emerging. From the end of wave X, price action seems to be developing into a diagonal pattern that fits into the minute degree sub-wave ‘a’ of Y. This diagonal is currently completing wave (v) of a (minor degree in blue) around $80, which is a major round number. Once the diagonal completes and a bearish price action follows, we can expect a corrective wave b downwards but should stay above the low of wave (X). This is expected to provide bullish opportunities for minute wave y of Y. Wave c of Y of (B) is expected to be the last lap for wave (B). Large bearish action will be anticipated below $60.

In conclusion, WTI is in a medium-term corrective rally that is expected to be completed in the next two legs. A big sell-off should happen afterward.

Technical Analyst : Sanmi Adeagbo

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

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