The contract is riding on a wave C from $9.25-1/2. It is the third wave of a presumed three-wave cycle from $9.57-1/4. This wave has found a support around $8.66, its 107 percent projection level.
Following the rise above the resistance at $8.70, the contract is likely to bounce more towards $8.77-1/2. The support at $8.66 is strengthened by a lower support range of $8.63-1/4 to $8.64-1/4, formed by the Sept. 18, 2018 low and the July 16, 2018 low. A break below $8.66 may cause a loss limited to the support zone.
On the hourly chart, the bullish divergence on the hourly MACD suggests a further bounce as well. Wave pattern indicates the progress of a wave 4, which is capable of travelling into the range of $8.77-1/2 to $8.81-1/2.
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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. **