U.S. oil NYMEX:CL1! may retest resistance at $69.13 per barrel, a break above that level could lead to gains into the $69.99-$70.85 range.
The contract managed to stabilize around a support at $67.34, the 386.4% projection level of a downtrend from $95.44. The stabilization, in the context of a bullish divergence on the hourly MACD, strongly suggests exhaustion of the downtrend.
Indeed, the trend could be well broken down into five waves, a structure indicating a completion of the trend. Immediate support is at $68.07, a break below which could trigger a fall into the $66.35-$67.34 range.
On the daily chart, the market has broken support at $70.52. It is supposed to fall toward $64.07. The expected bounce on the hourly chart looks like a pullback toward $70.52, now resistance.
A surge above this resistance could indicate a bounce as strong as the one from $86.35.
* Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own. His analyses are exclusively published on the Workspace platform - a London Stock Exchange product.
** 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.