Our crude oil outlook update will start with our analysis from February 25th, because you should know how our bigger picture scenario looks like. As you can see, crude oil has been trading according to the forecast so far and we will continue to use it as a map for possible future developments. Next we have to go to a smaller time frame. On the chart below we notice that price has come to a very tricky moment. If wave 4 reaches the bottom of wave 1 at 100 dollars and 13 cents, our count would be invalidated, since waves 1 and 4 must not overlap. However, sticking to the plan, we think that wave 4 is close to completion and prices would fall some more in wave 5.
For further confirmation we have to look even deeper into wave 4, in order to see if it has a corrective structure. The next chart shows a closer sight into the white rectangle.
And the answer is yes, it does not look like an impulse, so it should be a correction. In fact it seems to be a double zig-zag with a triangle in wave X. After every correction the larger trend resumes. So what we have is three degrees of trend confirming our wave count. That is why we have all the evidence to expect one more decline in wave 5, which would probably lead prices of crude oil close to 96.50 before a reversal happens. A reversal, which would be only temporary, because the larger trend would be pointing down. Of course you have to keep in mind that there are no guarantees on the market. This is only a forecast, not a prophecy.
Charts by www.trader.bg
