WTI Crude Resistance Is Seen Around $42.50-43.00
28 July 2020
WTI Crude might have carved a meaningful top around $42.50 levels or would print yet another high around $43.00 levels before reversing lower again. The commodity might be preparing to produce a corrective drop towards $26.00 levels at least.
WTI Crude probable wave counts are as follows: The rally through $0.01 lows since April 2020 could be into its last leg to complete a corrective A-B-C. We have presented an hourly chart view since $37.00 lows, which might be close to complete.
Waves A and B are not seen on the current chart, while Wave C could be unfolding as a potential ending diagonal structure since $37.00 lows. An ending diagonal is a potential terminating pattern which shows exhaustion.
WTI Crude rally sine $0.01 historic lows in April 2020 could be near to completion with the ending diagonal Wave C shown here. Within the diagonal, potential Waves 1, 2, 3 and 4 seem to be complete and we might see a push towards $43.00 as Wave 5 completes.
We can expect a sharp reversal thereafter. Alternately, a drop below $40.50 would confirm that a meaningful top is already in place around $42.50 and WTI Crude is on its way lower. Either way, the commodity looks ready to turn lower.
Most traders might be preparing to initiate fresh short positions from $43.00 levels, with protective stops just above swing highs. Watch out for a break below $40.50 initial support which confirms a meaningful top in place.
Prepared by
Technical Analysis Team
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