SINGAPORE: US oil may test a resistance at $72.87 per barrel, a break above which could lead to a gain into the $73.99 to $74.98 range.

The bullish momentum over the past two days has been very strong. It bears the characteristics of a fierce wave (c), which may travel above the peak of the wave (a) around $72.87.

This wave (c) observes closely a set of projection levels of an uptrend from $65.60. The minor resistance at $71.47 looks easy to bulls.

The resistance established by a falling trendline around $72 will not be a hassle to bulls either, because of the fierce character of the wave (c).

US oil may drop towards $65.60

A break below the immediate support at $70.79 may trigger a shallow fall to $69.80. On the daily chart, the hammer on Monday and the big candlestick on Tuesday formed a typical bullish reversal pattern, suggesting a further gain towards $73.13-$75.46.

The subsequent rise could hardly be classified as the second pullback towards a rising trendline. Instead, it looks like a part of a high-low bottom from the Dec. 2 low of $62.43.