Based on wave pattern and projection analysis, U.S. oil may end its crash in a key support area between $9.76 and $11.16 per barrel next quarter.
The contract is riding on a wave (E), the final wave of a five-wave cycle from the 2008 high of $147.27.
This wave is related to the preceding wave © that ended at the 2016 low of $26.05.
A projection analysis on the wave (E) reveals a brief piercing below the 61.8% leve of $23.72.
Such an action suggest a extension of this wave to $11.16.
This projection analysis market two extreme levels at $2.55 and negative $9.15, which is unrealistic. Most likely, this wave (E) could complete around $11.16.
Three smaller waves make up the wave (E).
The third wave labeled “C” has briefly moved below its 123.6% projection level of $22.96.
It may extend a bit further into $9.76 - $17.92 range.
The bearish views are backed by a closer look at the structure of Wave © on the daily chart.
Five smaller waves make up this wave.
The third wave labeled “c” is still unfolding. it is expected to travel into a range of $11.72-$15.68, formed by its 261.8% and 238.2% projection levels.
A bounce from the current could most likely be limited to $25.68.