The wedge has been confirmed as a bearish continuation pattern, suggesting a target around $55.88. A retracement analysis on the uptrend from $55.88 to $61.19 reveals that oil has deeply pierced below a support at $58.54, the 50% level. It is likely to test the next support at $57.91.

Resistance is at $59.16, a break above which may lead to a gain limited to 59.94. On the daily chart, oil failed three times to break the resistance at $61.54. Its repeated failures to overcome this barrier confirm a steady downtrend from $75.60, which is extending towards $52.85, the 61.8% projection level of a downward wave (C). A bearish flag indicates a similar target.

Strategically, the target at $52.85 will be valid when the nearest support at $57.19 is broken.

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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. **