The contract has pierced twice above a resistance at $9.04-1/4, the 23.6 percent retracement of the downtrend from the June 10, 2016 high of $12.08-1/2 to the July 16, 2018 low of $8.10-1/2. Its persistence simply means that the uptrend from the $8.10-1/2 has not finished.
An extension of the rally is highly likely, thanks to the formation of a small double-bottom around $8.10-1/2. This pattern happened to develop around a long-term rising trendline.
Making this pattern more reliable is the false break below a support at $8.44-1/4, the November 2015, low.
This false break indicates a completion of the downtrend from the 2012 high of $17.94-3/4.
The trend could be broken down into five waves. Such a structure further indicates that the trend could be over.
Either the long-term uptrend from the 2002 low of $4.15-1/2 has resumed, or a very strong bounce is under way.
The double-bottom suggests a target at $10.09-1/2. Despite the struggle of the price around $9.04-1/4, this target remains intact. It will be aborted, however, should the contract breaks the support at $8.68-1/2.
A break may to cause much damage to the current uptrend, as the loss may be limited to a support at $8.38-1/4, which is strengthened by a similar one established by the rising trendline.
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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.