SINGAPORE: US oil faces a resistance at $72.87 per barrel. It may remain below this level or retreat into $69.80-$70.79 range.

The resistance is identified as the 100% projection level of an upward wave c from $65.60, which may end around $72.87 or extend into $74.98-$76.59 range.

A confirmed inverted head-and-shoulders suggests an extension of this wave towards $76.59.

It is not very clear how deep the current correction would be.

US oil may rise to $72.39; inverted H&SH pattern confirmed

The correction may be confined within the narrow range of $71.47-$72.87 or extend to $70.79 or $69.80. A break above $72.87 could confirm the continuation of the wave c.

On the daily chart, the strong rise from the Dec. 2 low of $62.43 still looks like a pullback towards a rising trendline.

The longer oil hovers around $71.69, the more likely it revisit $62.43. Even though the inverted head-and-shoulders suggests a target of $76.59, oil may fail to fulfil this target as well.

A break below $69.36 would indicate a continuation of the downtrend.

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.