Oil is riding on a wave C that developed from the June 19 high of $115.71. This wave is capable of travelling to $77.70, its 100 percent Fibonacci projection level. It has been disrupted by a support at $82.87, the 86.4 percent projection level.
The rebound triggered by the support is labelled as a wave 4, the fourth wave of a five-wave cycle that developed from the Sept. 17 high of $99.61. Despite its extension, this wave seems have completed around a resistance at $86.67, the 76.4 percent level.
This wave is expected to be totally reversed by a downward wave 5.
** 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.