WTI Crude Is Testing Resistance Around $41.50/60

21 July 2020

WTI Crude might be terminating its last leg within a potential triangle before resuming lower towards $26.00 levels. The commodity might be facing resistance just ahead of $41.50/60 mark as bears prepare to be back in control.

WTI Crude probable wave counts on an hourly chart are as follows: The commodity had managed to print $41.60 highs on 23 June 2020. Since then it has dropped towards 37.06 levels, which had been marked as Wave 1/A.

The above drop could be the first leg of a corrective drop or Wave 1 within a potential 5 wave drop towards $0.01 lows. In either case, we can expect at least a drop below $37.00 levels before WTI Crude decides further direction.

The price action since $37.06 lows is looking as a sideways triangle consolidation or a flat. Either way, a top is expected to form soon around $41.00/10 levels and WTI Crude should be back in control of bears, pushing lower towards $37.00.

If the above counts hold well, WTI Crude should ideally stay below $41.60 levels and push lower below $37.00 as Wave 3/C begins to unfold. The counter trend rally is passing through $39.50, and a push lower would accelerate the drop.

Most traders might be preparing to sell around current price action ($41.00/10), with a protective stop above $41.60 and projected targets below $37.00 levels. Only a break above $41.60 on a consistent basis, would change the structure.

Prepared by
Technical Analysis Team

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