SINGAPORE: US oil may revisit its Monday low of $82.10 per barrel, as the bounce from this level has been deeply reversed.
The drop on Tuesday was much deeper than expected. It suggests a completion of the bounce which was disappointingly short-lived.
The bounce could be just a splash of the tidal wave unfolding towards $80.02, the 61.8% projection level of the downtrend from $90.19.
Immediate resistance is at $84.63, a break above which may lead to a gain into $85.70-$86.76 range. On the daily chart, the hammer on Monday was not confirmed as a bullish reversal signal, as a black candle appeared on Tuesday.
The downtrend from $104.46 remains steady, which is riding on a wave C that could travel to $73.93. A projection analysis on a bigger wave (C) reveals a lower target zone of $62.89-$71.76.
A realistic target could be $81.14.