USOIL: Impeding Triangle Breakout?

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The WTI crude oil structure is indicative of a powerful bearish impulse trend. This 5-wave move consists of primary waves ①-②-③-④-⑤ and is part of a cycle-degree a-b-c correction.

A few sessions back, the intermediate-degree 5-wave bearish impulse completed in primary wave ③. This was naturally followed by a correction in wave ④, which resembles a triangle pattern.

With that in mind, USOIL is poised to continue to move down in wave ⑤.

The impending decline could take us down as far as the $9.75 area. At that level, wave ⑤ will be at the 138.2% Fibonacci extension of wave ③.usoil

A second look into both correction waves ② and ④ suggests that the latter might float at current or higher levels for a little longer to respect the Elliott wave alternation rule.

Should this formation prevail, the bulls could attempt to push prices higher in the intermediate wave (Y), which is the last resort of the primary correction ④.

Wave (Y) could take us near the $29.80 area. At that level, wave (Y) will be equal to wave (W).

After the completion of wave ④, a decline in wave ⑤ could be seen. But this time, the low could be marked a tab below $19.74 only, as it is usually triangle breakouts that cause powerful breakouts, not complex zigzag corrections.

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