USOIL Technical Outlook - 4-Hour Chart AnalysisKey Analysis and Components:
Wyckoff Accumulation Phase:
The current price action suggests that USOIL is in Phase B of a Wyckoff Accumulation.
After a preliminary supply (PSY) and a buying climax (BC), the market experienced a secondary test (ST) and a shakeout (SOW in Phase B), confirming the accumulation phase.
The upthrust (UT) in Phase B could suggest a false breakout, which typically results in a test of lower levels, marking the transition into Phase C.
Elliott Wave Count:
The market completed a potential five-wave structure (v) as part of the larger cycle, which topped near 73.25.
The corrective wave structure is unfolding, marked by waves a-b-c, which suggests further downside before completing the correction.
The anticipated wave C retracement could potentially bring the price towards key Fibonacci support levels, likely around the 50% (69.43) and 0.618 (68.54) retracement levels.
Key Support and Resistance Levels:
Resistance levels are marked by the LPSY (Last Point of Supply) zones near 73.85 and 71.64. These levels serve as potential turning points for any future upward attempts.
Support levels are defined around the POC (Point of Control) at 69.42 and the Fibonacci retracement levels. The 68.54 level acts as a critical invalidation point for the overall bullish scenario.
Point of Control and Volume Profile:
The POC (69.42) highlights the price area with the highest traded volume, indicating strong market interest and likely support.
The chart further emphasizes equilibrium at the 0.5 (69.43) level, a midpoint that balances the market between premium and discount pricing zones.
Potential Bearish Scenario:
The red projected path indicates a possible continuation of bearish movement. This aligns with the corrective structure expected in Phase C of Wyckoff, which could see the market testing lower levels before accumulation concludes.
Should prices break below the 68.54 invalidation level, a deeper correction may follow, targeting the 65.23 zone, marked as the premium area on the chart.
Market Conclusion (W Close):
The W Close (Weekly Close) is marked on September 29, 2024, and could play a pivotal role in determining the market's direction. The transition from Phase B to Phase C would likely unfold over the next week, giving traders insight into whether the accumulation phase is nearing completion or if further downside is likely.
Conclusion:
The USOIL market is currently in an accumulation phase, with a possible downtrend in the short term as prices work through the corrective structure in Phase B. Key levels to watch include 69.43 for potential support and 73.85 for resistance. Invalidation of this bullish accumulation occurs if prices drop below 68.54. The expected conclusion of the corrective wave could lead to renewed bullish momentum once the market tests lower accumulation levels. Traders should remain vigilant as the market transitions through these phases.
