Crude oil's decline from $104.99 (the April 16 peak) is unfolding as an impulse that can be sub-divided into 13 swings. Today’s recovery to $101.52 was wave 4, and wave 5 to the downside is currently unfolding.
From here, wave 5 can test the $99.61 – $100.08 range before the cycle completes and an upside reaction begins to materialize.
Expect RSI divergence to stay intact given the new low, and as long as that remains the case, we like escalating longs in Oil and don’t like chasing shorts at current price levels.
By Eric Morera of Elliottwave-Forecast.com
