SINGAPORE: US oil may retest a resistance at $104.20 per barrel, a break could lead to a gain into $105.59-$107.82 range. The strong rise on Thursday may extend a bit on Friday.
A short falling trendline points at a target of $106.71 which looks doubtful, as the drop from $114.05 demonstrates impulsive wave nature while the rise displays corrective wave characteristic.
US oil may retest support at $94.71
Such a combination of the wave modes only suggest a steady downtrend which is expected to resume upon the completion of the current bounce.
A break below $101.96 may trigger a drop to $99.72.
Such a drop could be deep enough to confirm a continuation of the downtrend. On the daily chart, oil is riding on a wave (C), which is expected to extend to $86.11.
Even though the reaction of the market around the 76.4% projection level of $94.98 is stronger than expected, it does not necessarily mean a reversal of the downtrend.
The hammer on Wednesday and the white candlestick on Thursday suggest a further bounce on Friday.
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