One pager report on WTI OIL Positional Buy for 107.5 - 110.75

WTI OIL Buy @ 99.6 CMP Stop @ 98 TGT 102 – 104.5 – 107.5 – 110.75

Looking from the above chart WTI Oil has fallen from the level of 112.2$ and tested the lower level of 91.75$, where after a short pull back in form of profit booking till 100.7$ retested the lower level of 91.40 which has given a formation of Double bottom. This pattern indicated reversal in price and taking a small resistance at midpoint at 100.7 continued the uptrend and tested the level of 105.2$ from where reversal in prices were seen. Generally when the pattern formation is formed and thereafter directional movement is seen it indicates the movement of wave pattern formation, either this might be in the form of a-b-c wave or can show sign of 5 wave pattern formation. Initially we will take it as Elliot wave pattern  of impulsive wave as its just completing the wave (ii) which has retraced by 61.8% of the wave (i) and is showing sign of entering in wave (iii) where we can look at minimum of 107.5 which is 76.4% of wave (i) from bottom of wave (ii), OR might test the level of 110.75 which comes to 100% retracement of wave (i) on higher side. After testing the higher level of 107.5$ to 110.75$ which is near the top of 112.2$ where the market has started falling, slight correction can be expected in the form of wave (iv) and then reenter in uptrend in the Elliot wave pattern formation.

Pattern refers to the wave patterns or formations, while ratio (the relationship between numbers, particularly the Fibonacci series) is useful for measuring waves. To use the theory in everyday trading, the trader determines the main wave, or supercycle, goes long and then sells or shorts the position as the pattern runs out of steam and a reversal is imminent.

·         The Five-Wave Pattern:     In its most basic form the Elliott Wave Theory states that all market action follow a repetitive rhythm of a five waves in the directions of the main trend followed by three corrective waves (a "5-3" move)

·         Fibonacci Price Extensions

Fibonacci price extensions are used by traders to determine areas where they will wish to take profits in the next leg of an up-or downtrend. Percentage extension levels are plotted as horizontal lines above/below the previous trend move. The most popular extension levels are 61.8%, 100.0%, 138.2% and 161.8%.

Rajeev Darji; +91-9820987859 : Blog – rajeevdarji.blogspot.com