Crude oil fell to a new swing low in the last few sessions making a pullback from the highs bigger and more complex, but it still has a look of a contra-trend move. We are tracking wave 4 on the 4h chart which is now at important 50% Fibonacci level, with price specifically trading in sub-wave c, that seems to be an ending diagonal. An ending diagonal is a powerful reversal pattern, that may after its completion push price higher. As such, our view remains bullish here, for a turn up into wave 5 within a context of a bullish cycle from higher degree charts.

If price breaks beneath the 47.10 level, then we would adjust the wave count.

Crude OIL, 4H

The ending diagonal is a special type of motive wave that occurs primarily in the wave 5 position when price has moved too far and too fast. Some ending diagonal triangles appear in the C wave of an ABC correction. In all cases, the ending diagonal terminates the move of larger patterns.

Basic Ending Diagonal:

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