Get it while it's cheap
Hello everyone - I do not trade or speculate on oil, although I do look at the price from time to time. With oil being a commodity that has moved sideways for the past 25 years, it may seem pointless to try to apply wave theory towards it. After charting the cycle, I noticed that the waves have unfolded in patterns that can be defined by the wave theory while making little progress overall.
I’m not going to go into this too deeply and will not use any other indicators besides moving averages. With that being said, the weekly line chart appears to be in the early stages of wave III of the cycle that began in 1998. Wave I was followed what I am considering to be a double three correction (flat, zig-zag, zig-zag) that ended with the COVID shock that sent the price briefly under $20 per barrel.
On the daily chart, the moving averages are coiling in a triangular pattern. I am calling this (B) of Primary 2. It looks like we are completing Minor E of the triangle, which should lead to lower lows in the near future. Since the price will be breaking the 200-week moving average, there should be a pretty significant drop. It is difficult to guess where (C) of Primary 2 will take us. I’m currently using 0.618 of Primary 1 as a potential endpoint, which could see oil going to $30-$40 per barrel.
If this all ends up playing out, the end of Primary 2 could be the lowest price oil goes to for a long, long time. Let me know what you think of my analysis and thank you for reading!
I’m not going to go into this too deeply and will not use any other indicators besides moving averages. With that being said, the weekly line chart appears to be in the early stages of wave III of the cycle that began in 1998. Wave I was followed what I am considering to be a double three correction (flat, zig-zag, zig-zag) that ended with the COVID shock that sent the price briefly under $20 per barrel.
On the daily chart, the moving averages are coiling in a triangular pattern. I am calling this (B) of Primary 2. It looks like we are completing Minor E of the triangle, which should lead to lower lows in the near future. Since the price will be breaking the 200-week moving average, there should be a pretty significant drop. It is difficult to guess where (C) of Primary 2 will take us. I’m currently using 0.618 of Primary 1 as a potential endpoint, which could see oil going to $30-$40 per barrel.
If this all ends up playing out, the end of Primary 2 could be the lowest price oil goes to for a long, long time. Let me know what you think of my analysis and thank you for reading!
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