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.

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