Good day traders!

Crude oil is reversing lower, unfolding a new drop away from 58.20 level. This drop can suggest a completed three-wave rally within corrective leg D and a three-wave reversal to be in the making within final wave E as part of a bigger Elliott wave triangle. Support and a new turning point higher can be around the 56.70 level, where the Fibonacci ratio of 61.8 can act as a reversal.

Crude oil, 1h

Below we have the 4h view for crude oil.

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.