US oil may test $80.17, extending loss to Friday

SINGAPORE: US oil may test a support at $80.17 per barrel, a break below which could cause a fall to $78.94.

A five-wave cycle from $67.12 has completed, as confirmed by the deep fall from $85.38. The wave (4) developed from $79.98 to $74.96, which defines the target range for the next few days.

A retracement analysis on the cycle reveals a slightly higher target zone of $76.25-$78.40.

Another retracement analysis on the shorter trend from $74.96 marks a realistic target of $78.94.

Resistance is at $81.40, a break above which may lead to a gain limited to $82, a resistance established by a rising trendline.

On the daily chart, oil is likely to close low on Thursday to form another black candlestick.

It may stabilise in the support zone of $78.42-$79.71 on Friday.

The drop from the Oct. 25 high is driven by a wave iv, which may complete in this zone and be reversed by an upward wave v.

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