The resistance is identified as the 23.6% retracement of the downtrend from $4.68-3/4 to $3.87-1/4. It blocks the way towards $4.18-1/4.

Given that the current bounce has been observing the retracements closely, it is likely to extend to $4.18-1/4. The shallow correction triggered by this resistance is regarded as a pullback towards a falling trendline. The pullback is over.

However, wave pattern suggests that a downward wave C from $4.68-3/4 looks incomplete, as it may eventually travel to $3.70-1/2, its 161.8% projection level. The continuation of this wave will be confirmed only when the support at $3.99 is broken.

A rise to $4.09 may confirm a break above $4.06-1/4 and the target at $4.18-1/4.

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** 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. **