This week crude briefly violated that resistance and got stalled right underneath. Technically speaking the bearish count is severely damaged because price violated the critical resistance. However, taking into account the resistance shall be placed at the highest point of the previous major corrective wave ( iv ) up we may have here two alternative ways of drawing such a resistance. Originally I drew it off the completion point of the wave ( iv ) up. However, that wave ( iv ) up was shaped as a triangle where the final subwave e was not the highest point of the corrective wave ( iv ) up! If I use the top of the subwave a of the triangle the critical resistance would be 55.06. In that case the bearish case is still alive because the resistance has never been breached.
That move up off the December low has a clear a-b-c structure where c stretched to 223.6% extension of the wave a up. That is a very common and strong extension. At this moment the micro structure of the final wave c up looks very completed. However, another scenario is that the last move up was wave a of v followed by a pullback in wave b of v. Then we are left with one more move up in wave c of v targeting 54.80 – 55.30. That is the upped border of the lower red zone.
There is a good chance that this rally off December low is a larger wave A up which should be followed by a drop in a corrective wave B down targeting either $48.90, 50% retrace of the rally, or $47.70 – 46.80 ( 61.8% – 66.7% retrace).
I am convinced that we do not have here a good bullish setup. One more move higher would give us a chance to go short for an imminent correction after 4-week long rally. But at this point it is more likely that we saw a major bottom in December 2018 and coming pullback will not be able to make a new lower low but rather partially retrace that rally.