WTI Crude finally breaks lower as we have been calling for a potential top since several trading sessions. An intermediary top seems to be in place at $43.75 mark as prices break supports around $41.45 and $38.71 respectively. Bears seem to be in control for now.
WTI Crude probable wave counts are as follows: The commodity had potentially carved an ending diagonal $34.34 and $43.75 levels as highlighted on the chart here. Since then it seems to have carved an impulse drop toward $38.55 lows today.
If the above wave counts hold well, we should witness a corrective rally towards $42.00 mark in the near term before WTI Crude resumes lower again. Immediate resistance is seen towards $43.75 levels, while support comes in around $34.34 respectively.
The fibonacci 0.618 retracement of recent drop between $43.75 and $38.55 is seen towards $41.75 levels. Probability of a bearish bounce remain high if prices manage to reach there in the near term. Also note that downside projections remains around $35.40 and $30.20 respectively.
At a larger degree, WTI Crude might be looking to drop towards $26.00 and $16.00 levels. The entire rally between $0.01 and $43.75 could be retraced, going forward. The corrective wave could be a part of a larger degree triangle consolidation.
Traders might be preparing to initiate fresh short positions around $41.75/42.00 mark, with a protective stop above $43.75 and a projected target below $35.00 in the near term.
Technical Analysis Team
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