Executive Summary
- Crude oil continues to trend lower
- Any rallies likely hold below $70 and lead to further declines
- Downside targets include $61-63, and mid-50’s
Crude Oil Elliott Wave Analysis
Crude oil has been skidding for several weeks. Crude oil prices are now sitting near support that projects back to H1 2023.
This has been no surprise to us as we forecasted a decline in crude oil prices that would carry to the low 60’s and possibly mid-50’s.
Our Elliott wave analysis shows we are in the midst of a third wave decline. Wave 3’s, in the Elliott wave sequence, tend to be the longest and the strongest wave. Therefore, a persistent decline below the support shelf of 2023 likely carries crude oil down to $61-63.
If crude oil prices were to rally, the Elliott wave model we are following suggests those rallies would be temporary and likely hold below $70 en route to the $61-63 target.
Once the target of $61-63 is reached, that likely terminates wave (iii) of ((iii)). That wave pattern suggests a couple more unfolding rallies and declines that could push crude oil down into the mid-50’s.
Bottom Line
Crude oil in the middle of a wave 3 decline. Some support may be found near $64 but any bounces are anticipated to be temporary and hold below $70.
A cluster of wave relationships appear in the $61-63 range with even lower levels possible to the mid-50’s.
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