SINGAPORE: Brent oil may revisit its March 7 high of $139.13 per barrel next quarter, driven by a wave (C).
The downtrend from the 2008 high of $147.50 was almost reversed by the uptrend from $15.98.
The uptrend may have been driven by a wave (C), the third wave of a long-term cycle for the 1998 low of $9.55.
This wave observes closely a set of its projection levels.
The resistance at $135.13 was responsible for the deep drop to the March 16 low of $96.93.
The wave (C) may look incomplete until it travels to $153.88.
The drop is thus categorized as a correction against the uptrend.
In addition to the set of projection levels, oil also watches carefully a set of retracements on the fall from $147.50 to $15.98.
The support at $97.26 - the 61.8% level, has been working together with the one at $101.20 to stop the fall. Even though this set of retracements participate in controlling the uptrend precisely, the strong rally could hardly fall into the category of a retracement.
The uptrend is believed to have resumed, as confirmed by the stabilization of the price around $97.26. A break below $97.26, however, could strongly indicate a reversal of the uptrend from $15.98.
A closer look at the uptrend from $15.98 reveals its motive wave structure. The trend is still riding on a wave (3), which consists of many smaller waves.
Deep as it is, the drop from the March high of $139.13 is classified as a wave (3)-4, which is expected to be reversed by the current wave (3)-5.
An alternate wave count suggests the completion of a five-wave cycle from $15.98. Both of these wave counts indicate a rise into $121.34-$129.61 range.
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