Last week we posted our analysis on Oil prices using our Elliottwave count warning that the upside in Oil prices is limited and that traders should prepare for a major pull back. There is still no confirmation of such a pull back starting, technically trend remains bullish. However we need to focus on specific key levels that will help us reach a conclusion sooner.

Blue numbers - Elliott wave count

Price technically remains in a bullish trend as price is making higher highs and higher lows. Our most probable scenario using the Elliottwave theory, tells us that we are currently on the 5th and final wave of the rise from the $62 lows. The 5th wave could very well be over but we are not sure yet. The recent low at $86.75 is the key price level we are talking about. As long as price is above it, price can continue to move higher to new highs. If price breaks below it, then we will be very confident that the entire upward movement is over and at least a short-term pull back will start. The first short-term pull back target would at $81.40 if price does not make new higher highs. Concluding, our view remains the same, bulls remain in control but they have to be very cautious as we continue to believe we are near the end of this trend.