- Crude is trading in a broad range of 5500 - 4600 for more than a year now (shown in the weekly chart below).
- What more, that this consolidation is taking a shape of a triangular contraction.
- Again, when we have such kind of price patterns, we need to exercise patience, and play the ping pong game with the markets.
- There was a sharp fall in first half of April and then an equally sharp recovery. This recovery is looking very much like a 3 wave pattern.
- I have marked possible resistance zone on the charts, between 5275 - 5230, this zone is a result of a fibonacci confluence zone, and has high probability of effecting a reversal.
- As an EWP (Elliott Wave Principle) and CTA (Classical Technical Analysis) practitioner, I am always on the look out for price zones where I can place myself against the consensus with least possible amount of risk. Coz, crowds are often wrong at price extremes during consolidations.
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