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These two supports are identified respectively as the 338.2 percent and the 361.8 percent Fibonacci projection levels of a downtrend that developed from $57.28, an hourly chart high touched on Jan. 2.
Wave pattern suggests that oil is riding on a wave (5), which has been unfolding within a small channel, the lower channel line of which points a target zone of $47.70-$48.31.
Even though oil looks much oversold, it could be too early to conclude that it is near a bottom, as based on a medium-term analysis, it may eventually drop to $41.99.
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