Few weeks back oil reversed sharply from the 112 high when a five wave rally from 91.00 area completed a larger degree of an extended wave 3). As such, the contra-trend reaction is called a corrective retracement that could now be bottoming. We are tracking red wave 4) that may look for a support around 50% Fibonacci retracement level compared to wave 3); that’s one of the most important Fibonacci levels when you are looking a reversal point. As such, be aware of a turning point to the upside.
OIL 4h
On 4h Chart Crude oil reached new low last week around 100 mark which is a strong psychological price that could react as a support. We also see the wave pattern which is pointing for a turning point. The latest count shows idea of an ending diagonal placed in wave C position that is final leg of a corrective retracement from 112. Bullish divergence on the RSI also suggests that lows are near. We however want to see a strong bounce through the upper channel line to confirm a bullish reversal. (more)
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