SINGAPORE: Brent oil may extend gains into a range of $113.33 to $114.33 per barrel, as its uptrend from $101.30 may have resumed.
The correction from $115.69 only managed to reverse about 61.8% of the preceding uptrend from $101.30. The strong reaction of the market to the key support of $106.80 suggests a continuation of the uptrend.
The trend is expected to extend above $115.69. Support is at $110.70, a break below may cause a shallow fall to $109.52. On the daily chart, a piercing pattern formed between Wednesday and Thursday.
It is a typical bullish reversal signal, confirming the completion of the drop from the May 17 high of $115.69.
Even if the pattern turns out to be failed, it still indicates a rise on Friday.
A wedge may prove to be a bullish pattern, as oil is poised to break the resistance at $113.05 and rise towards $118.03-$123.01 range.