SINGAPORE: U.S. oil may drop to $58.23 per barrel, following its failure to rise above its March 21 high of $60.39.
The two highs around $60.39 suggest the development of a flat or the formation of a double-top. Both of these patterns indicate a further drop to $58.23, the 23.6 percent retracement of the uptrend from $51.23 to $60.39.
A break below $58.23 could confirm both the double-top and a target at $55.81. Should oil manage to stabilize around $58.23, the uptrend is likely to resume.
Signals on the daily chart are tricky, as oil is moving sideways around a resistance at $59.63, the 50 percent retracement of the downtrend from $76.90 to $42.36. It could have made two false breaks above this barrier.
A drop below its March 25 low of $58.17 could confirm a deep correction towards $55.55.
* 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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