SINGAPORE: US oil may test a resistance at $86.76 per barrel, a break above could open the way towards $87.66-$88.07 range.
The roller-coaster move of the price on Monday suggests the development of a wave C, the third wave of a three-wave cycle from $81.20.
This wave could either end around $87.66, if it is weak, or extend to $91.09, if it proves strong.
Before testing $86.76, oil may retrace moderately to $84.63, as indicated by the symmetrical nature of the chart.
A break below $84.63 could open the way towards $83.32. On the daily chart, oil failed to break a support at $81.14 again.
US oil may retest resistance at $86.76
The hammer on Monday indicates a further bounce towards $89.20.
However, the current bounce is expected to be much weaker than the one from the Sept. 8 low of $81.20, probably to end below $89.20.
Both of these bounces are a part of a downtrend from $104.46, which is riding on a wave C that could travel to $73.93.
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