Brent Oil Prices to End the Slump Soon?

Brent Oil has been declining sharply during the last five months, falling down from above $115 per barrel in June to under $77 in November. It may seem the sell-off will last forever, but the Elliott Wave Principle gives us the right to disagree. It states that every price move, regardless of how big, is just one wave of a larger patterned cycle. So, where does this 38-dollar slump fit into the bigger picture? In order to find the answer, we have to look at a large enough time-frame chart, such as weekly.

According to the theory, the five-wave impulse shows the direction of the larger trend. Every impulse is followed by a three-wave correction in the opposite direction. The chart shows, that after the crash of 2008 there is one such impulse from $36 to $128. We will label it “A”. This means that all that happened after the $128 peak should be the natural three-wave retracement. And it really looks like oil brent has drawn an a-b-c zig-zag corrective pattern, where wave “b” is a triangle. Triangles precede the last move of the larger sequence. Here, the larger sequence is the a-b-c zig-zag and the last move is wave “c”, which is currently in progress. If this is the correct count, wave “c” of B should be expected to end somewhere in the zone of the 61.8% Fibonacci level. Then the 5-3 Elliott Wave cycle would be completed and the uptrend could resume in the face of wave C. It may seem impossible now, but if this count is right, brent oil could reach the $130 mark in the next two or three years.