SINGAPORE: US oil may break a support at $86.39 per barrel and drop into a range of $82.56 to $84.68.
The depth of the fall from $93.64 confirmed a reversal of the uptrend from $76.25, even though the fall closely observes a set of the retracements on the shorter uptrend from $79.14.
Three waves make up the fall.
The wave c may travel to $84.34, near $84.68. Resistance is at $88.10, a break above which may lead to a gain to $90.22.
On the daily chart, three black crows formed, which is a strong bearish reversal pattern.
It is certain that the bounce triggered by the support at $77.24 was over.
It is just a matter of time before oil breaks the support zone of $85.59-$86.11 and falls towards $81.14.
US oil may hover above $88.10 for one day before falling
The downtrend is riding on a wave C, the third wave of a bigger wave (C).
Both of these waves look incomplete.
A conservative target of $73.93 lies ahead.
An aggressive target will be $62.89.
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