Good day traders!
Crude oil is still trading choppy, slow and overlapping which suggests a bigger Elliott wave triangle correction to be in progress. Specifically we see price trading at the end of corrective leg D of a bigger triangle, that can see limited upside around the 58.30 level. A breach below the lower channel line would suggest a three-wave reversal within final leg E to be in progress. Support for corrective leg E can later be found at the 56.88 level, of a former swing low.
Crude oil, 1h
Below we have the 4h chart and its full development.
Crude oil, 4h
A Triangle is a common 5-wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature. Triangles move within two channel lines drawn from waves A to C, and from waves B to D. A Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.
Triangles can occur in wave 4, wave B, wave X position or in some very rare cases also in wave Y of a combination.
Elliott wave triangle correction:
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