close icon

Ahead of WTI Crude Oil’s Two-Year High

The price of WTI crude oil surpassed the $58 a barrel mark this week. The last time it traded at that level was in June, 2015, when the oil crash was still in full swing. Almost two and a half years later, the bulls’ efforts are finally being rewarded. It has not been a smooth ride, though, and the last two weeks were no exception. WTI crude oil’s price climbed to $57.89 on November 8th, fueling hopes of even higher levels. Instead, a sharp dip followed, dragging the price down to $54.81 six days later. And just when the bulls were ready to capitulate, crude oil reversed to the north again. Luckily, the Elliott Wave analysis of the chart below, sent to subscribers before the market opened on Monday, November 13th, managed to prepare us for all that.(some marks have been removed for this article)
wti crude oil elliott wave analysis november 13
This chart revealed the wave structure of the entire rally from $49.08 on October 6th. According to the theory, trends move in repetitive patterns. The most common pattern is called an impulse and it occurs in the direction of the larger trend. Since WTI crude oil was definitely rising, we the rally from $49.08 should eventually take the shape of an impulsive pattern. The problem was that by November 13th, the fourth and fifth waves – labeled (iv) and (v) here – were still missing. Therefore, it made sense to first expect more weakness in wave (iv), before the uptrend could resume in wave (v). Wave (iv) was supposed to breach the lower line of the price channel, but as long as crude oil stayed above $53.88, the positive outlook would remain valid. Lower than that would have meant this count was wrong and something else was happening. Ten days later, the updated chart below shows how the situation developed.

wti crude oil elliott wave analysis november 23

Wave (iv) was a little deeper than expected, but what is important is that it did not reach the stop-loss level at $53.88. So, there was no reason to surrender to the negative sentiment caused by the drop in the the price of crude oil. All traders had to do was remain calm and disciplined, and stick to the analysis. Six trading days after wave (iv) terminated at $54.81, WTI was already trading above $58 a barrel.



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Elliott Wave Setup Helps Crude Add 8.4% in a Week

The price of crude oil is approaching the $61 mark helped by U.S.-Iran tensions and a 9.5-million barrel decrease in US inventories. A rally in oil prices might seem easy to explain now, but it wasn’t so obvious a week ago. On July 3rd, crude was barely holding above $56 a barrel after a decline…

Read More »

Crude Oil Shows Why Alternative Counts Matter

Trade war fears are officially back, causing indiscriminate selling of stocks and commodities alike. Crude oil has been hit especially hard as supply glut worries are also beginning to reemerge. Crude oil closed at $53.34 a barrel last week, but this selloff was triggered by the breach of a key level in the week before…

Read More »

Crude Oil Made an Elliott Wave “Push-Up” Last Week

It has been an eventful week for crude oil traders. On Wednesday, January 16th, the EIA revealed that inventories have decreased by 2.7 million barrels from the previous week. In the same time, it became clear that U.S. oil production rose to a record high of 11.9 million barrels per day. The first piece of…

Read More »

Catching Crude Oil ‘s $7-Rally Amid Supply Glut Fears

Crude oil bulls got slaughtered in the last three months of 2018. Between the start of October and the end of December, the price fell by over 45% from $77.07 to $42.21, sparking fears of a new supply glut. Then, the selloff’s sudden stop caught nearly everyone by surprise. Yesterday, WTI crude oil reached $52.48.…

Read More »

Crude Oil Ignores OPEC-Russia Deal to Breach $50

WTI crude oil dipped below $50 a barrel in late-November, but quickly recovered to $54.54 on December 4th. The price spent the next ten days above the $50 mark and it looked like the bulls might be able to bounce up from this key psychological level. Unfortunately for them, the price of crude oil fell…

Read More »

Crude Oil: How Elliott Wave Deals with Uncertainty

On October 3rd, the price of WTI crude oil was up 27.9% year-to-date, corresponding to a rally from $60.09 to $76.88 a barrel in a little over nine months. Unfortunately for the bulls, no trend lasts forever and the rest of October confirmed that fact. Crude oil prices plunged to $64.83 yesterday, erasing almost 72%…

Read More »

WTI Crude Oil and the Case Against Top/Bottom Picking

Traders often think they have to catch each and every move in its entirety, in order to be successful. The sad truth is that is impossible and trying to achieve it can easily backfire and lead to more losses instead of bigger profits. Whether you trade Forex, WTI crude oil or stocks, nobody can catch…

Read More »

More analyses