The support is identified as the 76.4 percent retracement of the uptrend from $8.80-1/2 to $9.41. It works as the last barrier towards $8.80-1/2.
The contract is riding on a wave C, the third wave of a three-wave cycle from $9.41. It is capable of traveling to the bottom of the previous wave A at $8.80-1/2.
The pattern from the Jan. 18 high of $9.20-1/4 has been confirmed as a head-and-shoulders, which indicates a target around $8.80-1/2 as well.
A break above $9.03-1/2 may lead to a gain limited to $9.10-3/4. On the daily chart, the contract has moved into a lower channel, which suggests a more bearish target around $8.54-3/4, the 7 percent retracement of the downtrend from $10.54-1/2 to $8.39-3/4.
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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. **