ELLIOTT WAVE ANALYSIS
MONTHLY CHART
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A very large expanded flat may have ended at the last low. This is labelled cycle wave II.
Within cycle wave II, primary wave B is within the normal range of up to 1.38 times the length of primary wave A. Primary wave C moves below the end of primary wave A avoiding a truncation and a rare running flat.
If this part of the wave count is correctly labelled, then the bear market may be over for XOP. A three wave structure moving lower indicates the larger trend may be upwards.
The alternate idea would be that this expanded flat may be only wave W of a double flat or combination; the correction would continue sideways for a few more years.
WEEKLY CHART
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From the end of cycle wave II, a five up may have completed. This is labelled primary wave 1.
Primary wave 2 may be an incomplete regular flat correction. Regular flats usually have C waves that end slightly beyond the end of their A waves.
Intermediate wave (C) must subdivide as a five wave structure. So far minor waves 1 and 2 may be complete. Minor wave 3 may only subdivide as an impulse. Strong downwards movement last week fits expectations for a third wave.
Primary wave 2 may not move beyond the start of primary wave 1 below 22.06.
DAILY CHART
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Minor wave 3 exhibits strength. It looks like a third wave.
Within minor wave 3, minute wave i and ii may be complete.
Within minute wave iii, minuette waves (i), (ii) and now (iii) may be complete. Minuette wave (iv) may not move into minuette wave (i) price territory above 40.26.
Overall, this wave count expects more downwards movement to at least slightly below 28.96. This target may be met in another few months.
Along the way down, another consolidation to last about one to two months for minor wave 4 may be expected. When it arrives, minor wave 4 may not move into minor wave 1 price territory.
Draw an acceleration channel about downwards movement. Draw the first trend line from the low labelled minor wave 1 to the last low, then place a parallel copy up on the high labelled minor wave 2. As price keeps moving lower, keep redrawing the channel. When minor wave 3 is complete, then the upper edge of this channel may provide resistance for minor wave 4.
TECHNICAL ANALYSIS
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Price consolidated, with support about 39.65 and resistance about 45.00, from the 7th of May 2018 to the 22nd of October 2018.
Price broke out from the consolidation zone on the 22nd of October on a strong downwards day. The following day gapped lower on another strong downwards day with support from volume, creating a breakaway gap. This looks like a classic downwards breakout.
If price bounces up here to test resistance, then expect strong resistance at the breakaway gap at 39.10.
Currently RSI is oversold and there is a bullish candlestick pattern. Expect a small bounce or consolidation here.
The target is about 32.99.
Published @ 02:37 a.m. EST.
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