Crude Oil Turns Higher After Ending Diagonal; Exxon Mobil Could Follow

Good day to everyone! After the recent move down in oil prices, crude may once again be looking for a turning point.

In fact, oil is already turning nicely higher after we identified an ending diagonal in wave C earlier this week, and it looks like a higher low is already in place.

Price is now testing the upper line of the corrective channel. If this line is broken, confirmed by a daily close outside the channel and above the potential base channel resistance around $93, we can expect much more upside in the sessions ahead. That could also put some downside pressure on stocks, as inflation concerns remain in play.

At the same time, I'm watching Exxon Mobil, as this stock could trade much higher if oil prices recover. The correlation between crude oil and XOM is pretty tight, and Exxon Mobil is actually holding up much better this time. If oil keeps rebounding, I think the stock could make a nice move back toward its March highs around $176.

The pullback from those highs into the June lows clearly unfolded in three waves, while the current rebound started with five waves, followed by a consolidation. That consolidation is what interests me most, as it likely points to another push higher.

If you'd like to follow our analysis and my views on a daily basis, you're more than welcome to check out our premium services.

Trade well,
Grega