OIL "debacle"

Hi Traders,

The Oil, now at 93.50, got a big hit this week and is set to decline further.

TARGETS

likely: area 93.62-93.26,  92.21-91.82 and 89.97-89.77
possible: area 87.51-87.06
maybe: 83.80

ELLIOTT WAVE SETUP

In the weekly chart below the OIL performed an a-b-c-d and is now enfolding the last leg downwards (wave e).

If it this impulse downwards goes through the supports at $89 and $87 it has the potential to squeeze the commodity down to $80 and even below.
However, if it doesn't move below those supports, there's the chance of a reversal and even a breakout to the upside.

Note: the 2 grey channels:

• the large one has touched the boundaries 4 times meaning that there should be a breakout
• the inner one has touched 4 times as well. Once again, this means that there should be a breakout

As I said, it's not clear whether the breakout will be on the upside or the downside but I wouldn't worry for now.

weekly chart - click to enlarge

The daily chart below is a bit more precise with the targets, meaning that the first impulse downwards (out of 3) should end in the area 93.62-93.26. More possible supports in the areas 92.23-91.82 and 90.35-89.98

daily chart - click to enlarge

Even more interesting the 4-hour chart below with a substantial double top and some targets in the area 92.21-91.82 and 89.97-89.77

4-hour chart - click to enlarge

ENTRY POINT

If, in the 1-hour chart below, there's a little pullback from the area 93.50-93.35 to form a top in area 94.36-94.58, this would form "minor retracement wave 4" which would unfold most likely in 3 waves.

This  could be a further chances to get a good entry point for your short.

1-hour chart - click to enlarge