Since the February-June Crude Oil rally last year when price moved from $26 to $51, the black commodity has been moving in a range. From early March 2016 till now, the highest price has been $56 and the least is $38. Technically, we have spotted the possibility of a long term triangle congestion. The following looks at how price could react in the coming weeks and months.
Last week price rallied from $49 back to the $52 level and has stayed sideways since then. Our last update had the possibility of this triangle at sight. If this would happen, a last dip toward $45 is expected. Will the recent rally, if price is unwilling to complete triangle, soar above $56 roof instead?. The chart below was used in the last update.
A strong dip is still highly probable to $47 or even deeper to $45 before the bullish resumption. Alternatively, if price rallies to break above $51.4 top, then it could test the $52.8 top and our triangle will be considered truncated. We favor the bearish continuation until price proves otherwise.
A corrective dip was expected downside in the form of a zigzag pattern to complete the last leg of the triangle. Price rallied further instead but still keeps below $52. The chart below shows the congestive triangle pattern about to complete on the daily time frame.
If this wave count is correct, we would see a dip toward $45 as price continues to be resisted at $52. If the triangle pattern completes as expected, a strong rally could happen toward $60 or more as price completes the bullish correction that started early 2016. If this forecast doesn’t happen but price breaks above $56 instead without the last dip, we should expect the rally to continue to $60-$70. Follow up with our intraday analysis on Crude Oil and other major commodities like Gold and Silver. Stay tuned for the next update.
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