SINGAPORE: US oil may retest a resistance at $77.13 per barrel, a break above which could lead to a gain into $77.85-$78.58 range. The strong bounce on March 10 seems to be due to an extension of a wedge. It could also be interpreted as the final struggle of bulls to maintain the price above $73.80, the Feb. 22 low.
The upper trendline of the wedge points at a target of $80.94, which looks too far away to be realistic.
Most likely, the contract could only climb into $77.85-$78.58 range. A break below $76.23 may be followed by a drop into $74.77-$75.67 range.
On the daily chart, oil managed to stabilise around a channel line.
The following development of chart could be a bit tricky. Bulls may regain some momentum from this stabilisation and try to push the price towards $80.62.
Oil slips as rising supplies balance Chinese demand hopes
The stabilisation could also be interpreted as a strategic retreat of bears, before launching a heavy attack.
Over the next one or two days, clearer signals may appear to suggest a direction.
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