SINGAPORE: Brent oil may end its weak bounce in the resistance zone of $113.97-$116.26 and retest a support at $105.14 per barrel thereafter.
The bounce is driven by a wave 4, one of the five small waves that make up the big wave c from $133.15.
This wave 4 is expected to be roughly equal to the wave 2, to end around $116.26.
The final wave 5 would drive the price towards $102-$104.29 range.
A break above $116.26 coulid lead to a gain to $119.96.
The current wave count and the bearish outlook will be reviewed once oil climbs to $119.96.
The drop from the Monday high of $139.13 was due to the completion of a five-wave cycle from $65.72.
A retracement analysis suggests a target zone of $93.76-$102.43.
On the daily chart, a retracement analysis on the downtrend from the 2008 high of $147.50 to $15.98 reveals a break below a support at $116.46. The break opened the way towards $97.26.
The fall from $139.13 looks so deep that it strongly suggests a reversal of the middle-term uptrend from $15.98.
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.
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