Crude oil is in its seventh straight week of steady rise, but is it now the time to be a buyer? In order to find the answer to this question, we have to look at the charts. As shown on the daily chart below, the rally from 77.20 to 112.25 is a zig-zag correction (A)-(B)-(C) with wave (B) triangle. The top at 112.25 was made on August 28th 2013. Crude Oil has been declining ever since.
What is more important is that this decline is impulsive, in other words, it consists of five waves, marked “(1) or (A)”. In terms of the Wave Principle after every five waves, a three-wave move in the opposite direction should follow. On the daily chart it looks like this 3-wave move is an expanding flat. If we want to determine whether it is finished or not, we have to move our attention to a smaller time-frame.
On the 4-hour chart is visible that there is still some room left for another swing higher, but after that wave “(3) or (C)” to the downside should begin.