SINGAPORE: Brent oil may rise into a range of $85.77 to $87 per barrel, as the consolidation from the Oct. 25 high of $86.70 may adopt a flat pattern.
The pattern consists of three waves that are roughly equal.
This relation would mean an extension of the current wave b towards 86.74.
A more bullish scenario is the uptrend may have resumed. Regardless of the exact interpretation, oil seems to be poised to retest the resistance at $86.74, the 2018 high.
Immediate support is at $84.53, a break below could cause a fall into $83.05-$83.76 range.
On the daily chart, oil simply ignores the bearish divergence on the RSI and keeps rising.
This only happens when the bullish sentiment is extremely strong. It won’t be a surprise if the divergence is violated over the next few days.
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