SINGAPORE: U.S. oil looks neutral in a range of $55.61-$56.79 per barrel, and an escape could suggest a direction.
The range is formed by the 14.6 percent and the 7 percent retracements of the uptrend from $42.36 to $57.88. A break above $56.79 could lead to a gain to $57.88, while a break below $55.61 could cause a loss to $54.22.
The bias could be towards the downside, as oil failed twice to break a resistance at $57.93, the 50 percent projection level of an upward wave C from $51.23. These failures suggest the formation of a double-top, which is a trend reversal pattern.
The pattern will be confirmed when oil falls below its Feb. 26 low of $55.02. It indicates a target around $51.95. On the daily chart, a retracement analysis on a medium-term uptrend from $26.05 to $76.90 reveals a key resistance at $57.48, the 38.2 percent level.
Given that oil failed twice to break $57.48, it may remain below this level for a few days or retrace towards $51.48.
* The analysis is based on delayed data, prediction may be affected. Charts are not available in reports received in email box through "Alert". To get charts, use the news code of TECH/C to retrieve the original reports.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **
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