OIL is trading slightly lower after recent reversal from the upper channel resistance line shown on the four-hourly chart. However, we cannot ignore a three wave decline from July high, which is clearly a contra-trend movement, called a zig-zag in Elliott Wave theory.

With that in mind, we will continue to look for higher prices on crude oil as long as 102.15 support is in place. As such, we suspect that current set-back is wave (ii) that may look for a support in
104-105 zone, in one of the Fibonacci support levels. Reversal from there, in impulsive fashion back to 108 will be nice indication for a bullish moves, but then towards 110 level.

Oil 4h On a daily chart of oil we can see that price broke sharply higher few weeks back, which is looking impulsive; its sharp move in the short period of time. Impulses are five wave patterns and if we focus just on latest rally from 91.20 we can see that move is not in five waves yet.

As such, we think that latest pull-back from above 109 was wave four so we are looking higher into wave 5. Crude Oil: Daily