SINGAPORE: US oil may bounce to $77.42 per barrel before falling again, as suggested by its wave pattern. The bounce is driven by a wave 4, which is expected to be reversed by a wave 5. A falling trendline suggests a target of the wave 4 around $77.42.

A weak wave 4 may end around $76.97 as well.

A break below $76.17 could be followed by a drop to $75.45. Such a drop would be considered as a continuation of the downtrend towards $74.09.

On the daily chart, oil broke a support at $77.24.

The break opened the way towards $71.76.

Oil prices steady after US stockpiles swell

Before oil falls towards this bearish target, it may pull back towards $77.24 first. The deep drop on Feb. 17 suggests a continuation of a wave (C) from $123.68. The drop looks full of momentum.

It may quickly extend to $71.76. A close above $77.24 on Monday could delay the fulfilment of this target. However, the bearish outlook will remain unchanged unless oil breaks $80.62.