SINGAPORE: US oil may bounce into a range of $73.26-$74.17 per barrel as it has stabilised around a support of $70.89. The support is identified as the 61.8% projection level of a wave C from $83.34.

This wave may either complete around this level or extend a lot to $63.20.

Due to the completion of a five-wave cycle from $82.72, the contract may bounce towards the peak of the wave 4 around $75.49.

The bullish divergence on the hourly RSI suggests a decent bounce as well.

A break below $69.90 could open the way towards $66.45-$68.58 range.

On the daily chart, the downtrend seems to have lost its momentum around a support at $71.76, which works together with the one at $72.04 on the hourly chart to temporarily stop the fall.

Oil rebounds, but still on track for biggest weekly declines

The spinning top on Dec. 9 represents a dissipation of the bearish momentum.

Oil is expected to consolidate around $71.76 for a few days before resuming its drop towards $62.89.