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.
As with any investment opportunity there is a risk of making losses on investments that Trading Lounge expresses opinions on.
Historical results are no guarantee of future returns. Some investments are inherently riskier than others. At worst, you could lose your entire investment. TradingLounge™ uses a range of technical analysis tools, software and basic fundamental analysis as well as economic forecasts aimed at minimizing the potential for loss.
The advice we provide through our TradingLounge™ websites and our TradingLounge™ Membership has been prepared without considering your objectives, financial situation or needs. Reliance on such advice, information or data is at your own risk. The decision to trade and the method of trading is for you alone to decide. This information is of a general nature only, so you should, before acting upon any of the information or advice provided by us, consider the appropriateness of the advice considering your own objectives, financial situation or needs. Therefore, you should consult your financial advisor or accountant to determine whether trading in securities and derivatives products is appropriate for you considering your financial circumstances.
Recommended Content
Editors’ Picks
EUR/USD extends slide toward 1.1000 on broad USD strength
EUR/USD stays under bearish pressure and trades at a fresh multi-week low below 1.1050 on Thursday. The upbeat ISM Services PMI data for September boosts the US Dollar, while rising bets for an ECB rate cut in October undermine the Euro.
GBP/USD tests multi-week lows near 1.3100 after Bailey's dovish remarks
GBP/USD loses more than 1% and trades at around 1.3100, pressured by dovish comments from BoE Governor Andrew Bailey, who said that the central bank could become 'more activist' on rate cuts if inflation eases. On the other hand, the USD benefits from strong PMI data.
Gold struggles to gain traction, trades below $2,650
Gold oscillates in a tight range below $2,650 after bets fade that the Fed will continue slashing interest rates aggressively. Although XAU/USD finds support from increasing geopolitical risks, the broad USD strength doesn't allow the pair to stage a rebound.
Bitcoin stabilizes at crucial support after major crash
Bitcoin (BTC) trades slightly down on Thursday, after declining over 7% this week, and holds near a crucial support level; a sustained close below this threshold could signal further declines ahead.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.