The correction may consist of three waves. So far, only the first wave labelled a has unfolded. The current wave labeled b may end around $9.13-1/4, the 100 percent projection level of a bigger wave C from $8.57. It is expected to be reversed by a downward wave c.

Making a drop more likely is a resistance at $9.16-3/4, the 38.2 percent retracement of the downtrend from $10.63-1/4 to $8.26-1/4. The contract failed to overcome this barrier in its first attempt.

The failure suggests that the contract needs to retrace more for accumulating enough momentum to resume its rally. A break above $9.13-1/4 (first chart), may lead to a gain to $9.26-1/2.

* Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.

No information in this analysis should be considered as being business, financial or legal advice. 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.