UK Oil, long-term Wave and PA analysis
First of all I want to review the chart from other aspects which are much understandable and simpler. I always consider them as supporting ideas even if my main focus is on wave analysis.
From classic charting perspective, there is a large pennant on the chart which has started from ATH. It's obviously not a textbook pennant. You can draw 3 different trend lines using its top pivots (ATH - D, B - D and ATH - B lines). In 2 of the 3 the price has currently broken above the trend line.
primary target can be drawn from width of the pennant. Adding the amount to the breakout point.
On the supply and demand side, I have market two important narrow areas (around $110 and $76.5) based on PA, both have been POC (the red dashed line) for a long time. The upper one consists of three yearly closes and the highest yearly close ever on Oil. The price levels which I haven't marked but the POC has stayed flat for a while are also important S/R, including the current one which price is above. And finally there is $52 to $66 area which is the last yearly cluster. You can count many more but I believe the mentioned ones are the most important ones near current price level.
If you check weekly chart price has been making higher highs since April 2020 crash and recently crossed the 2019 trading range which the sharp drop of last year started from. And currently its dealing with the area around $76.5.
predicting solely based on supply and demand, I can say in short term Oil will move toward $82.8 and however not as significant as others but it is the only remaining resistance before $110 area. Considering the supports below such as 2019 price range as a cluster, the POC, and $76.5 area which will be flipped clearly by then, it may be not very difficult to cross the $82.8 resistance.
But $110 area looks nothing like $82.8 resistance and it's very important and decisive.
And now, the wave analysis!
IF the (B) wave has finished: The move which I have labeled as (A), I'm not sure what exactly it is but seems to be a Diametric (ABCDEFG). Anyway, it's the fastest major move on the Oil chart so I guess it's very likely to be the beginning of something larger or at least a move in the direction of the larger forming pattern. The (B) wave which It is a rare type of triangle suits to be the correction of it's preceding wave.
Wave (A) can't be an impulse wave and it is not sharp enough to be the first sub wave of contracting and expanding triangles or flat pattern. The remaining highly probable options are Diametric and Neutral Triangle (ABCDE with C being the longest of the A, C and E).
In addition to classic analysis, which we often use the preceding move of pennants and flags to get the ideal target by adding it up to or deducting it from the breakout price, the two discussed patterns also suggests that $580 is very likely in long-term. Not to mention it is the minimum target if the currently playing (C) wave is the third sub wave of a Neutral Triangle.
IF the (B) wave has NOT finished: Besides the eliminations I mentioned in the last paragraph, in this case a Diametric is also very unlikely to form in one higher degree, because almost always adjacent sub waves of a Diametric take nearly equal time ranges.
Neutral Triangle remains highly probable, but the (B) wave will extend, taking nearly double the current time range.
In this case there should be a small x wave which will not cross $82.8 and will ideally take 30 - 70% of the time of what I have labeled as (B) on the chart above. Then another bearish pattern will began.
Now all these stuff said, including the ones I might have forgot during publication of this idea, what is my own take and expectation of future of this chart?
I think the supply zone around $110 will be tested. There may be a correction before but a clean pump toward without any deep correction seems more probable to me. A major correction might happen after and if price manages to stay near the resistance without correcting its way back to the lows of what I consider to be the beginning of wave (C) or end of wave (B), we may see Oil breaking out of $110 resistance. Something similar to what happened with $35 in 2001 - 2003. If this breakout happens I believe price will go parabolic, at least hitting two first fib levels on the chart. If not then I have to reconsider my opinion because based on my current calculations this should happen.
Finally, as mentioned on the chart, if a (C) wave is playing as per my expectation, the minimum time target is June 2030. Meaning that it will not end before the date and probably will take even more depending on the pattern which is forming on the higher degree.
From classic charting perspective, there is a large pennant on the chart which has started from ATH. It's obviously not a textbook pennant. You can draw 3 different trend lines using its top pivots (ATH - D, B - D and ATH - B lines). In 2 of the 3 the price has currently broken above the trend line.
primary target can be drawn from width of the pennant. Adding the amount to the breakout point.
On the supply and demand side, I have market two important narrow areas (around $110 and $76.5) based on PA, both have been POC (the red dashed line) for a long time. The upper one consists of three yearly closes and the highest yearly close ever on Oil. The price levels which I haven't marked but the POC has stayed flat for a while are also important S/R, including the current one which price is above. And finally there is $52 to $66 area which is the last yearly cluster. You can count many more but I believe the mentioned ones are the most important ones near current price level.
If you check weekly chart price has been making higher highs since April 2020 crash and recently crossed the 2019 trading range which the sharp drop of last year started from. And currently its dealing with the area around $76.5.
predicting solely based on supply and demand, I can say in short term Oil will move toward $82.8 and however not as significant as others but it is the only remaining resistance before $110 area. Considering the supports below such as 2019 price range as a cluster, the POC, and $76.5 area which will be flipped clearly by then, it may be not very difficult to cross the $82.8 resistance.
But $110 area looks nothing like $82.8 resistance and it's very important and decisive.
And now, the wave analysis!
IF the (B) wave has finished: The move which I have labeled as (A), I'm not sure what exactly it is but seems to be a Diametric (ABCDEFG). Anyway, it's the fastest major move on the Oil chart so I guess it's very likely to be the beginning of something larger or at least a move in the direction of the larger forming pattern. The (B) wave which It is a rare type of triangle suits to be the correction of it's preceding wave.
Wave (A) can't be an impulse wave and it is not sharp enough to be the first sub wave of contracting and expanding triangles or flat pattern. The remaining highly probable options are Diametric and Neutral Triangle (ABCDE with C being the longest of the A, C and E).
In addition to classic analysis, which we often use the preceding move of pennants and flags to get the ideal target by adding it up to or deducting it from the breakout price, the two discussed patterns also suggests that $580 is very likely in long-term. Not to mention it is the minimum target if the currently playing (C) wave is the third sub wave of a Neutral Triangle.
IF the (B) wave has NOT finished: Besides the eliminations I mentioned in the last paragraph, in this case a Diametric is also very unlikely to form in one higher degree, because almost always adjacent sub waves of a Diametric take nearly equal time ranges.
Neutral Triangle remains highly probable, but the (B) wave will extend, taking nearly double the current time range.
In this case there should be a small x wave which will not cross $82.8 and will ideally take 30 - 70% of the time of what I have labeled as (B) on the chart above. Then another bearish pattern will began.
Now all these stuff said, including the ones I might have forgot during publication of this idea, what is my own take and expectation of future of this chart?
I think the supply zone around $110 will be tested. There may be a correction before but a clean pump toward without any deep correction seems more probable to me. A major correction might happen after and if price manages to stay near the resistance without correcting its way back to the lows of what I consider to be the beginning of wave (C) or end of wave (B), we may see Oil breaking out of $110 resistance. Something similar to what happened with $35 in 2001 - 2003. If this breakout happens I believe price will go parabolic, at least hitting two first fib levels on the chart. If not then I have to reconsider my opinion because based on my current calculations this should happen.
Finally, as mentioned on the chart, if a (C) wave is playing as per my expectation, the minimum time target is June 2030. Meaning that it will not end before the date and probably will take even more depending on the pattern which is forming on the higher degree.
Feragatname
Bilgiler ve yayınlar, TradingView tarafından sağlanan veya onaylanan finansal, yatırım, işlem veya diğer türden tavsiye veya tavsiyeler anlamına gelmez ve teşkil etmez. Kullanım Şartları'nda daha fazlasını okuyun.