WTI Crude Carves Potential Top Just Below $44.00

1 September 2020

WTI Crude might have carved a potential top around $43.75 or is on its way to carve one soon. The price action is indicating that there might be a shallow high above $43.50 before the commodity gives in to bears. Look lower from here, going forward.

WTI Crude larger degree wave counts are as follows: The commodity had completed an impulse rally through $147.00 levels in 2008 (chart not seen here). Since then, it has been in a corrective phase and probably into Wave (C) of the correction.

Wave (C) usually unfolds into 5 waves and in this case it initiated from $110.00/112.00 levels. The drop between $110.00 through $0.01 has completed 3 waves until now. If the above proposed wave structure holds, the recent rally between $0.01 through $43.75 is Wave 4 underway.

Normally, Wave 4 would unfold as a triangle and should take time to terminate. Also it will unfold as a-b-c-d-e waves, before dropping lower towards Wave 5 to complete the corrective drop. If the above lower degree wave counts are correct, WTI Crude might have completed its first Wave a, within the triangle.

A drop below $41.45 would confirm an interim top is in place around $43.75 levels and that a 3 wave drop towards Wave b of the triangle is underway. The fibonacci 0.618 of the entire rally is seen towards $27.00/28.00 mark and probability remains high for a push through those levels.

Traders might be prepared to initiate fresh short positions after a break below $41.45 support. The protective stop could be placed above $44.00 mark and projected targets below $28.00 respectively.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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