SINGAPORE: Brent oil may test a resistance at $116.11, a break above which may lead to a gain to $118.25 per barrel.

The stabilization of the price around a rising trendline suggests an extension of the bounce from the June 22 low of $107.03.

Three waves make up the bounce. The wave c is unfolding towards $116.11.

Brent oil may revisit June 22 low of $107.03

It is not very clear how far this wave could travel. At its full capacity, the wave c may extend to $120.90. It may end around $118.25 if it is weak.

Support is at $111.32, a break below which could trigger a drop into $107.03-$109.68 range.

On the daily chart, oil has broken a resistance at $113.05.

It is expected to test the next resistance at $118.03.

The contract is presumed to be riding on a wave (C) which could travel to $96.93, the bottom of the wave (A).

However, this bearish outlook will be reviewed once oil stands firm above $118.03.