Thursday, May 28, 2009

Elliott wave Analysis - Crude oil nearing top

Taking previous view on crude oil forward it seems crude oil is now in a process of toping out. Yesterday’s price action is suggestive of price entering 3 of 5 of C.

Once this final 5 wave upmove exhausts price would reverse.

Current wave count suggest that price may top at around $68 - $70 range before beginning their down move to previous lows of $33 and further to new lows.

The complete down wave 3 was from 128.6 to 32.4. We look for fourth wave to retrace 38.2% of this wave which is at about $70. The corrective ABC calls for C = 1.618 X A which is at $62.5 and C = 2.0 X A is at $70.

Lower degree fourth wave of an extended third ended at $71.6.

There is a strong confluence resistance at $68 - $72 price levels.

On a one hour graph the rally looks impulsive. Look for sign of exhaustion after price jumps above $65.