SINGAPORE: US oil may bounce moderately to $116.93 per barrel, as its drop from the Tuesday high of $119.98 looks too sharp to sustain.
The contract seems to have stabilized around a support at $113.69, which is strengthened by a similar one established by a rising trendline.
A bounce has been triggered, which may prove to be a continuation of the uptrend if oil could break above $116.93.
A break below $113.69 may cause a fall into $111.33-$112.63 range.
On the daily chart, a shooting star formed on Tuesday.
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It will only be confirmed as a reversal signal if oil closes below the same day low of $114.15.
The drop from the Tuesday high of $119.98 will be classified as a pullback towards $116.15 if the contract could close above this level on Wednesday.