The resistance is provided by the 14.6 percent retracement of downtrend from the 2008 high of $13.34-1/2 to the 2016 low of $3.59-1/2.
The downtrend consists of three waves. The third wave labeled C is roughly 0.618 times the length of the first wave labeled A.
Though this mathematical relation is not a perfect signal of a completion of the wave C, it simply makes no sense to assume the extension of this wave towards 38 cents - the 100 percent projection level.
There are higher lows and higher highs on the uptrend from $3.59-1/2. These are classical patterns to indicate the reversal of the preceding downtrend.
The drop from the August 2018 high of $5.93 is categorized as a pullback towards a falling trendline. The fall was driven by a wave (b), the second wave of a presumed three-wave cycle from $3.59-1/2.
This wave (b) could have completed around a support at $4.27-3/4. It is expected to be reversed by the third wave labeled (c), which is capable of traveling into the range of $5.66-1/2 to $6.55-3/4, formed by its 61.8 percent and the 100 percent projection levels.
A break below $4.27-3/4 could cause a loss limited to $3.59-1/2.
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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. **