SINGAPORE: Brent oil may test a support at $99.48 per barrel, to fill a gap forming on Monday.
The gap could be a common type which is generally to be covered very soon. Wave pattern suggests the completion of a small five-wave cycle from $90.12 and a bigger cycle from $69.24.
A top has formed at the Feb. 24 high of $105.79.
The current correction may consist of three waves. The jump on Monday seems to have been driven by a wave b, which will be reversed by a downward wave c.
The sudden gain is classified as a dead cat bounce, instead of a continuation of the uptrend. A break above $104.22 could lead to a gain into $105.37-$108 range.
On the daily chart, oil still hovers within the upper shadow of a shooting star forming on Feb. 24. The bearish reversal pattern has been confirmed by a black candlestick on Feb. 25. The rise on Monday may end up with another black candlestick with a long upper shadow.
Key resistance is at $104.50, a break above which may signal an extension of the uptrend towards $108.51-$115.72 range.
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