The resistance is identified as the 76.4 percent projection level of an upward wave C from $8.91-1/4. After travelling above $9.20-1/4, this wave has a better chance of extending to $9.38-1/2.
The correction triggered by the resistance looks like a pullback towards a falling trendline. This pullback may have ended around a support at $9.14-3/4. The target at $9.27-1/4 will be aborted, should the contract break $9.14-3/4, as the break could suggest a completion of the wave C.
Signals on the daily chart look a bit conflicting with the readings on the hourly chart, as the contract failed to go above the Jan. 7 high of $9.27-3/4. The failure casts a doubt on the extension of the uptrend from the Jan. 16 low of $8.91-1/4. Unless the contract could stand above $9.27-3/4 soon, it will be more and more likely to drop towards $8.90-1/4.
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** 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.