WTI Oil Elliott wave analysis – November 13


The oil market is shedding some profit after Monday’s optimistic virus vaccine reports. The following WTI oil Elliott wave analysis looks at what could happen next from perspective.

November 13, 2020 / AtoZ Markets – Oil prices are on the back foot since Wednesday with rising Covid cases in the US and Europe. Some parts of Europe have been on lockdowns for weeks. However, Pfizer vaccines reports on Monday lifted the market mood and WTI completed a 29% surge that started in late October. President Biden’s victory plays a large role in the bullish risk sentiments across the global markets as well. Together with vaccines, investors were quite optimistic. However, the Monday surges lost momentum and prices started falling since Tuesday with rising Covid -19 cases and possible Biden’s lockdowns in the US. Let’s take a proper look into what the risks are, going forward.

Will vaccines be ready before January amid rising Covid cases?

Although, Pfizer and some others have confirmed that vaccines can prevent the virus up to 90% efficiency. While this is a big boost, it seems the market fears that before the vaccines go into circulation, rising cases could result in fresh total lockdowns. Global leaders might use this strategy to kill the virus once and for all. Of course, this would lower economic recoveries and cause minor but significant dip for risk assets like the oil market. Fresh lockdowns would mean lower demand for oil and its products. If this is the case, we should expect the current oil minor dip to go lower especially if China and other countries join the lockdown.

Also, Joe Biden – US president-elect by many media outlets could impose fresh 4-6 weeks lockdown. This is expected to offset the bullish mood that followed his triumph at the polls earlier in November. The dip would be temporary ahead of vaccines and fresh stimulus package expected in the first quarter of 2021.

WTI Oil Elliott wave analysis

From the technical perspective, it seems WTI would take one more bearish move to complete a deeper correction below $33.47. After a massive 4-month recovery to $43.7 in September, the black Gold started a month retreat to $33.47. The surge that followed to $42.9 suggests the end of the bearish phase to $33.47. However, considering the ‘shallowness’ of the dip and the current global risk sentiment, the WTI bear might not be over yet. The chart below shows the WTI Oil Elliott wave analysis.

WTI oil elliott wave analysis

Chart from TradingView

After a bullish impulse wave rally to $43.72, the first corrective dip ended at $33.4. It was way short of the 38.2% Fibonacci retracement level of the entire impulse wave surge. However, until the price breaks above the $43.72, one could suspect, a double zigzag structure down to $28-31 around the 38.2% and 50% Fibonacci retracement levels. For confirmation, the price should drop to $37 at least.

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