Crude Oil Forecast: May WTI Poised to Test $43.1 Decision Point

WTI’s move up has been resilient for the past few weeks. The waves up from $29.85 may be interpreted as either a five-wave trend that is still forming Wave III or a three wave correction that has nearly completed Wave C. Technical factors indicate May WTI is approaching a decision point at $43.1.

In either case, whether the move is five waves or three waves, Wave A or I should meet the 1.618 projection at $43.1. A correction should then take place. The correction will determine whether or not the move up is a five-wave trend.

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Key support will be $38.0. This is the 38 percent retracement and is in line with the $37.52 swing high of Wave A or I.

A close below $38.0 would indicate the move up from $29.85 was a three wave correction. There is no evidence yet that prices will plummet to new lows. Therefore, upon a close below $38.0, a trading range in the mid-$30 is the most likely scenario.

Should prices hold above $38.0 and subsequently close over $43.1, the move up is most likely a five-wave pattern that will extend toward the 2.764 projection of $51.9. A move of this magnitude will take time, and should form another sub five-wave count like Wave III has. It will also likely be backed by a positive shift in underlying fundamentals.

This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary is a much more detailed and thorough energy price forecast. If you are interested in learning more, please sign up for a complimentary four-week trial.

Published by

Dean Rogers

Dean Rogers is the general manager of the Kase Call Center in Albuquerque, New Mexico. He oversees all of Kase and Company, Inc.’s operations including research and development, marketing, and client support. Dean began his career with Kase in early 2001 as a programmer, but has developed into Kase’s senior technical analyst. He writes Kase’s award winning weekly Crude Oil and Natural Gas Commentaries. He is an instructor at Kase's classes and webinars and provides all of the necessary training and support for Kase's hedging models and trading indicators for both retail and institutional traders.

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