Crude oil prices slump this week as selling pressure persists. The following technical analysis is based on the Elliott wave theory.
November 01, 2019 | AtoZ Markets – Oil prices closed in a bearish mood in October. The Oil market was choppy in October as it gradually mounted to higher prices although with low momentum. Eventually, prices slumped and will most probably continue the bearish run seen in the last two weeks of September. Brent crude slipped to $59 from $62 while WTI also lost $3 to hit $53 in the same period. However, there has been a very small recovery today but that is far from changing the larger market sentiments which appear bearish at the moment.
Technically, Oil prices are expected to slump further. The rally from the respective October lows completed clear corrective patterns. The bearish trend between mid-September and October 3 should then continue. If that happens, WTI should plummet toward $47 while Brent should drop toward $55. However, there are minor support levels on the way.
Crude oil prices slump: WTI and Brent analysis
In the last update, we used the chart below for WTI after the price completed a double zigzag pattern. At the terminating end of the pattern, an ending diagonal reversal pattern also completed. Price dropped quickly afterwards.
Therefore, we accepted that a bearish impulse wave should follow below the $51 low. Wave ii completed $55.9 and wave iii proceeded below $54.56. Although wave iii has been a bit slow, WTI price is largely expected to continue downside. As the new chart below shows, the price is moving sideways around the lower line of the corrective channel.
Wave ii has probably completed a flat pattern at $55.25 unless the current surge hits above it. The price is just around the neck of the channel. We will expect the sell-off to continue if there is a break below $53.73 intraday low. A similar structure is emerging on Brent Crude as the chart below shows.
Brent crude analysis
Wave iii is on the way – currently completing sub-waves i and ii (circled). If the current surge is limited below $61 and the price breaks below $59.6 afterwards, we should see the Brent oil falling deeper to $57 first and then $55. Unless something drastic happens, the crude oil prices slump should continue lower.