SINGAPORE: US oil may test a support at $78.95 per barrel, a break below which could cause a fall to $77.43.
The bounce from the Nov. 15 low of $79.30 looks very weak, which may have completed around a resistance at $81.42. Oil also broke a support at $80.19. The break opened the way towards $77.43-$78.95 range.
As long as oil hovers above $78.95, it is likely to bounce again towards $81.42. Only a break above $81.42 could alter the bearish outlook.
The contract is presumed to be riding on a wave C, which may travel to $77.84, its 100% projection level.
Oil prices rebound, edge up ahead of next week's OPEC meeting
On the daily chart, the correction from the Oct. 25 high of $85.41 looks so deep and lasting that it suggests a reversal of the uptrend from the August low of $61.74.
The orthodox peak could be at the Nov. 10 high of $84.97, following the completion of a failed fifth wave.
Key support is at $78.42, a break below which could confirm a double-top.
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