25 October 2009

Crude Oil : Nearing a Top

Lets have a look at the Crude Oil daily chart. After its steep fall from nearly $150 to $35 one of the Hottest Commodity have made another swift rise to above $80. I have labelled the rally from $35 till now as per EWT. What we see is that wave1 was 20 in length and wave3 was 28. So as per theory we can expect wave5 to reach a maximum of 28+65= 93. The minimum target of $77 has already been achieved and $85 which is an ideal target is not too far.

The other thing to note is that 50% retracement of the entire fall from $147 to $35 is at $91. Which gives us another reason to expect crude to face heavy weather in the coming days if it keeps on rallying.

Dollar Index too is showing signs of bottoming in near term, the prime reason for the Crude Oil's latest upmove.

So the 3 targets to keep in mind if you are an Oil trader are 85, 91 and 93.
Above 93 the wave count stands violated.


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