SINGAPORE: Brent oil may test a support at $82.86 per barrel, with a good chance of breaking below this level and falling towards $80.52-$81.75 range.
The fall from the Oct. 25 high of $86.70 consists of three waves. The current wave c is travelling towards $80.48, the 38.2% retracement of the uptrend from $70.42.
This wave is controlled more precisely by a set of projection levels on the uptrend from $73.26. Market opened low on Monday, due to a contract switch.
Technically, this price action is well interpreted by the wave pattern. Resistance is at $83.76, a break above which could lead to a gain into $85-$85.77 range.
A study on the January contract confirms the progress of a wave c towards $81.71.
Only a surge above $84.26 could signal the extension of the bounce.
On the daily chart, the drop is far from complete, as suggested by the bearish divergence on the daily RSI.
A projection analysis reveals a support zone of $77.96-$81.57, within which oil may stabilize and resume its uptrend.
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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