SINGAPORE: Brent oil may rise into a range of $85.77 to $87 per barrel, as the consolidation from the Oct. 25 high of $86.70 may adopt a flat pattern.
The pattern consists of three waves that are roughly equal.
This relation would mean an extension of the current wave b towards 86.74.
A more bullish scenario is the uptrend may have resumed. Regardless of the exact interpretation, oil seems to be poised to retest the resistance at $86.74, the 2018 high.
Immediate support is at $84.53, a break below could cause a fall into $83.05-$83.76 range.
On the daily chart, oil simply ignores the bearish divergence on the RSI and keeps rising.
This only happens when the bullish sentiment is extremely strong. It won't be a surprise if the divergence is violated over the next few days.
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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