WTI Crude might be preparing to break below $37.00 interim lows and proceed towards $26.00 in the next few trading sessions. Bears might remain in control for now and carve lower lows and lower highs going further.
WTI Crude had print historic lows at $0.01 after a religious selloff in April 2020. Since then, it has staged an impressive rally towards $41.60, immediate resistance marked on the hourly chart presented here.
Also note that the previous rally from $0.01 through $41.60 seems to be complete (not seen here). Hence, WTI Crude could be preparing for at least a 3 wave corrective drop towards $26.00 and further. It is quite probable for the next leg of rally to resume thereafter.
Let us have a look at the potential counts since $41.60, recent swing highs. The drop from $41.60 through $37.00 has been labelled as Wave A, within the proposed A-B-C corrective phase. The subsequent corrective rally managed to reach up to fibonacci 0.786 retracement of Wave A.
The termination point around $41.00 has been labelled as potential Wave B. If the above short term wave counts are correct, WTI Crude should stay below $41.60 levels and proceed lower towards $26.00 at least.
Most traders might be willing to either remain flat or remain aggressively short from $41.00 levels. The protective stop would go above $42.00 and projected targets below $26.00 at least, as the corrective drop unfolds Wave C lower.
Technical Analysis Team
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