Is Crude Oil price going to crash more? Wave perspective and Time cycle analysisSep 14, 2022
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Crude is an important element to understand the overall economic condition. falling Crude Oil prices suggest less demand in the economy and in turn contraction in business activity. For Countries like India, falling Crude Oil prices are good for the overall economy as we do import and are not involved in production.
Elliott wave helps us to navigate the trend of the market. Crude Oil has continued to be showing negative action over the past few sessions. It has worked out well especially if you know how to apply the Elliott wave along with the Time cycle.
In the below chart we have shown the Crude Oil movement along with the Neo wave and 115 Days Time cycle.
MCX CRUDE OIL DAILY CHART
Neo Wave Perspective: On a daily chart, prices have completed primary wave (4) near the cycle lows 850 level and post that we can see the rise on the upside in form of wave (5). Currently, intermediate wave (b) is moving in form of sideways to negative action. This wave b has retraced more than 61.80% of wave a. This indicates that the ongoing correction of wave (b) looks to be forming a Flat pattern.
Time Cycles: We have applied Time cycles in order to mark the important lows and also to get clarity about the direction. Here it has been following 115 days’ Time cycle very well. As per this, we can see that cycle is due in the first week of October. It will be important to see whether we can see a price recovery in form of wave (c) or it continues to drift lower.
In nutshell, the Crude Oil trend remains negative as of now but momentum is reducing on the downside. This opens the possibility of an upside reversal. Hence any move above 7300 followed by a 7900 level will indicate that trend has reversed on the upside to test the previous highs. Unless this happens, expect the lackluster movement to continue with the 6500 level as an important support level.
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