SINGAPORE: US oil is expected to rebound further to $50.04 per barrel, as it has broken a resistance at $48.38.
The resistance was at the 150 percent Fibonacci projection level of a downtrend that developed from the Dec. 1, 2014 high of $69.54. The next resistance will be at $50.04, the 138.2 percent level.
The trend is a part of a bigger trend falling from the Nov. 21 high of $77.83. Wave pattern indicates that five waves make up the bigger trend, and the fifth wave labelled 5 seems to be incomplete, because it may travel a similar distance as the first wave, the wave 1, to roughly arrive around $44.65, the 176.4 percent projection level.
That suggests the current rebound may end around $50.04, around which the downtrend will resume.
Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.
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