The resistance is identified as the 38.2 percent retracement of the uptrend from $8.80-1/2 to $9.41. The contract failed to break this resistance in its first attempt, after briefly piercing above this level.
However, it may retest this barrier, as the pattern from $8.80-1/2 looks like a rising wedge, which consists of five waves. The current wave labeled E may eventually travel to $9.32, which is pointed by the upper trendline of the pattern.
The correction triggered by the resistance may be shallow, limited to $9.10-3/4. On the daily chart, the contract is poised to retest a resistance zone of $9.21-3/4 to $9.27-3/4. A break above $9.27-3/4 could lead to a gain to $9.47.
A break below $9.10-3/4 (first chart) could cause a loss into the range of $8.94-3/4 to $9.03-1/2.
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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. **