Broken Channel Indicates More Bearish Movement For OIL

Gregor Horvat

Crude oil made only three waves up in September that we labeled it as a zigzag in wave 4. Notice that that wave 4 moved up into the area of a former wave four near 50.80 from where price turned down very sharply, through the lower support line of a corrective channel. This breakout confirms continuation lower, so we suspect that price is headed back to the lows of 2015. We see wave 5) of (C) that can be targeting even $30 in months ahead.

Crude Oil Daily Chart

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On the 4H chart, Crude Oil bounced sharply at the end of October but only with three waves that made a reversal down last week from around trend line resistance and 61.8% Fibonacci level. That was ideal zone for a bearish continuation that seems to be in full progress now after a break beneath 45.90 bearish level. As such, wave (ii) appears completed which means that 42.64 low should be retested; ideally it will be broken out that will make room for a move down to $39.

Crude Oil 4 Hour Chart

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Source: www.ew-forecast.com

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