As posted by a fellow EW technician Aibek a little while ago on Brent, WTI looks to be forming an ending diagonal.
The lower trendline has been hit and there is bullish divergence on 4H timeframe (the same divergence that kick started the move from $39 to mid $42) so the 5th and final wave could have already started.
The 0.618 extension of wave 2/3 is at $43,07...
Update on below idea:
Still believe oil is in a corrective pattern; either WXYXZ up to $41 area, or WXY is already completed at $40,58 and we're in wave 2 of an impulsive move down already. A break above $40,58 invalidates the wave 2 idea, a break above $41,62 invalidates the WXYXZ idea.
To me it looks like oil is in the early stages of C or wave 3, in addition there appears to be a head & shoulder formation after price hit the 0.5 level.
Oil could hit the 1:1 extension at $34,89 to complete a C wave and bounce up to a new high above $41,63, or push down much further to 1.618 extension at $32,12 to complete a wave 3 of deeper C.
Small timeframe idea for oil.
Could be ABC or wave 3 completing at $3990...a break above $40,86 could lead to a new high above $41,62 or be part of a more complex correction such as WXY or WXYXZ, a break below $39,90 could lead to a new low toward $39,50 for wave 5
Couple of theories in one chart on how oil might move in the coming days.
Scenario 1 (white) - Correction is already completed at $34,58 and now in an impulsive move towards mid $40's; A break above $40,61 would look good for this theory.
A break below $37,42 could play out scenario 2...
Scenario 2 (orange) - A correction is still underway in WXY form, price...