Crude Oil: Three Legs Up To $100-Elliott Wave Analysis

By: Gregor Horvat | Wed, Dec 11, 2013
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Crude oil reversed sharply to the upside last week so it seems that five waves down completed wave 3) and that current rally is a part of a contra trend reaction. We are talking about wave 4) that could stop around 100 area, but after three legs. For now, we see only one leg from the lows so expect to see more sideways or even bullish price action during the next few days.

Daily Crude Oil Chart

On the 4h chart we can see that sharp bounce from 91.70 and through the falling resistance line put temporary bullish price action in play. We are talking about wave 4) that should be made by minimum three legs because this is the minimum structure of a corrective price action.

At the moment we see only one leg up. This is most likely wave A, but we still expect to see waves B and C. Ideally price will turn south in the next few sessions with wave B back to 94.50-95.65 supports before going up into wave C towards 100 area as shown on the chart below.

Crude Oil 4-Hour Chart

On the intraday chart we see why prices could retrace back below 96.00 in the near future. Well, we can count five waves up in black wave A, which means that trend could find resistance soon. Keep in mind that after every five waves correction follows which will be a black wave B. This black wave B could then represent a long opportunity to catch wave C up.

Crude Oil Hourly Chart

 


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Gregor Horvat

Author: Gregor Horvat

Gregor Horvat
www.ew-forecast.com

Gregor Horvat

Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of www.ew-forecast.com, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on: SafeHaven.com, FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At www.ew-forecast.com he helps clients and educate them about the Elliott wave prinicple and how to label and track unfolding patterns in real time.  His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty however is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators.

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