SINGAPORE: Brent oil may bounce towards $77.96 per barrel, as it has stabilized around a support at $81.06.
The support is provided by the 123.6% projection level of an uptrend from $35.74, strengthened by a similar one established by a rising channel.
The trend is likely to extend towards the $85.17 to $89.63 range, if oil could maintain above $73.50.
A bearish target zone of $54.62 to $59.08 will be established if the support fails to hold.
The bearish momentum on Nov. 26 seems strong enough to indicate a subsequent break below this pivotal support. The depth of the fall from the October high of $86.70 also suggests a reversal of the uptrend form $15.98.
On the hourly chart, the current move is controlled by a set of retracements on the uptrend from $64.60 and a set of projection levels on the fall from $85.50.
In this turmoil phase, it is hard to speculate how far the current bounce could go.
The brief piercing above $75.65 offers a small clue that oil may extend its gains to $78.26, near $77.96 (daily chart).
A break below $74.98 could cause a fall into the $72.50 to $74.03 range.
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