SINGAPORE: US oil may break a resistance at $86.90 per barrel and rise into $88.39-$89.96 range, driven by a wave c.
This wave has travelled above its 100% projection level of $85.83. Chances are it may extend into $88.39-$89.96 range.
The nature of the rise is still classified as a bounce, instead of the beginning part of a medium-term uptrend.
A retracement analysis on the downtrend from $90.19 to $76.25 reveals a resistance at $86.90, which works together with the one at $86.81 to stop the rise and cause a correction.
Similar to the correction from the Oct. 3 high of $84.56, the current fall may end above $84.92, as suggested by a small rising channel.
US oil may rise into $84.37-$86 range
A break below $84.92 could cause a fall into $83.27-$84.25 range.
On the daily chart, oil has broken a resistance zone of $85.59-$86.11.
The break opened the way towards $89.20.
Despite a possible further gain, the downtrend may remain steady, as a wave C from $104.46 is expected to extend to $73.93, while a bigger wave (C) from $123.68 may eventually travel to $62.89.
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