SINGAPORE: Signals are a bit mixed as US oil is consolidating in a narrow range of $77.62-$79.75. Even though the contract briefly pierced above a falling channel, its current sideways move means an escape from the channel is very unlikley.
Until oil stands firm above $79.75, it is still likely to fall into the channel and resume its downtrend.
A break below $77.62 could confirm the continuation of the trend, while a break above $79.75 could drive a gain into $81.07-$82.30 range.
A double-top remains valid, indicating a target around $66. Even if oil could gain more, the upside is expected to be rather limited.
Signals on the daily chart turned a bit bullish, as a hammer on Monday was confirmed by the white candlestick on Tuesday.
They suggest a further bounce towards $80.62-$83.48 range.
Such a bounce may not have much impact on the downtrend from $123.68, as the trend is riding on a wave (C) which could travel into $62.89-$71.76 range.