Elliot Wave: Oil around the Support Line

Daily Forex Technicals | Written by TheLFB-Forex.com | Sep 23 09 12:06 GMT |
Usd/Cad "Ending Diagonal", Oil around the Support Line


Oil around the Support Line
Weekly Chart Trend: Mixed. Main price points: $33, and 74.90. Looking for: Wave 2)
Oil is still moving very slowly around the trend-line resistance and previous wave 1) top, which suggests that wave 2) still may be developing. As such, traders may see another move down to test the 38.2% retracement area again before the real gains come into the market. This scenario will be valid so long as the $33 low holds. A near-term break through the trend line support on the RSI indicator should be the key for move towards the $50-$60 area.




















Daily chart trend: Short possibilities. Main price points: 58.30, 67.00, and 74,90. Looking for: Wave C
Oil prices on the daily chart traded higher in the past week, near to $73 per barrel as things bounced from the trend line support a week earlier. It seems that wave II) is now complete, which should put near-term bearish moves into play. The wave B pattern was completed at $74.90, so wave C should be in progress already, where we will be looking for a five wave move towards $58.30, down to the wave A) support area. Meanwhile the market must not break through the $74.90 area, otherwise the wave count will be invalidated. Traders with a short bias, however, still need to patiently wait on a break through the lower support line and the $67.00 area for a down-trend confirmation of a blue wave C.



















4 Hour chart trend: Short possibilities. Main price points: 67.00, 69.00-69.50 and 73. Looking for: Move lower
On a four hour chart, oil prices slid very calmly over the last few days, after touching the 76.4% Fibonacci resistance area, around $73 per barrel. The prices have recently reached the support line for a third time in September, from where the market bounced to the upside over the last two sessions. It seems that this recent pull-back could be a black wave ii, so a move lower is expected where a break through the 69.00-69.50 support zone will signal a move lower into the red wave III) leg. The prices however, need to stay below the 73 resistance area until that break-out appears, otherwise the corrective count of the red wave II) will have to be re-worked.