SINGAPORE: US oil may retest a resistance at $69.62 per barrel, a break above could lead to a gain to $71.22.

The contract could be riding on a wave c, which is expected to travel to $71.22, its 61.8% projection level.

A falling trendline points at the same target as well.

The deep correction triggered by the resistance on Monday represents a weak momentum, which is not supposed to be with the wave c.

A failure to break $69.62 again was followed by a drop below $68.01 could strongly suggest a reversal of the uptrend from the August 23 low of $61.74.

On the daily chart, a doji formed around a resistance at $69.44 on Monday. Even though this pattern may not work precisely as a bearish reversal signal, it definitely tells the weakness of the market.

As far as Tuesday is concerned, oil may remain below $69.44, or worse, retreat towards $67.12. A break above $69.44 may confirm a target of $72.32.

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