US oil may rise to $71.20; temporary bottom confirmed
- The pattern will be confirmed when oil climbs to $70. It will then suggest a target of $76.61
SINGAPORE: US oil may rise to $71.20 per barrel, as suggested by its wave pattern and a retracement analysis.
The rise from the Dec. 2 low of $62.43 consists of three waves.
The third wave, labelled c, is unfolding. It is supposed to travel above the peak of the wave a of $69.22.
The rise is against the downtrend from $85.38. A retracement analysis reveals a target zone of $71.20-$73.91, which is reinforced by a possible inverted head-and-shoulders.
The pattern will be confirmed when oil climbs to $70. It will then suggest a target of $76.61.
Support is at $65.78, a break below which could be followed by a further drop towards the $62.43 to $64.04 range.
On the daily chart, a temporary bottom formed around $61.74. Oil may pull back towards a rising trendline, which establishes a resistance around $71.20.
The bearish outlook will be revised once oil breaks a resistance at $74.03, as the break would indicate a continuation of the uptrend.
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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