SINGAPORE: US oil may retreat into a range of $81.12-$82.18 per barrel, as a five-wave cycle from $74.96 may have ended.
This wave count could be justified by a shorter wave 5, which is the shortest compared to the wave 1 and the wave 3.
The bearish divergence on the hourly RSI endorses this wave count as well.
An expected rise could most likely be limited to a resistance zone of $84.94-$85.66.
From a longer perspective, the five-wave cycle makes the final part of a trend from the Sept. 1 low of $67.12.
Before a much lower target is worked out, the most pressing concern is to confirm the top at the Oct. 25 high of $85.41. The subjective wave count needs a strong support from an obvious classic top pattern, which has not appeared.
On the daily chart, following the two hanging men on Oct. 20 and Oct.
21, a shooting star emerged, adding some pessimism on the uptrend.
A black candlestick on Tuesday is still the key to a peak confirmation.
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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