SINGAPORE: Brent oil may test a support at $97.85 per barrel, a break below which could cause a fall into $94.20-$95.90 range.

A gap forming on Monday was covered.

This common gap signals a consolidation phase. The consolidation consists of three waves, the current wave c could travel close to the bottom of the wave a around $95.90.

Due to the contract switch, a small gap forming on Tuesday.

This is a common gap as well, likely to be filled. Before testing the support at $97.85, oil may bounce moderately towards $101.10.

A further gain above this level is less likely.

A break above $101.10 could lead to a gain into $102.80-$105.37 range.

On the daily chart, a shooting star followed by two black candlesticks is a convincing bearish reversal pattern.

A five-wave cycle from $65.72 may have completed, or the uptrend from $69.28 has peaked if the current wave count proves to be incorrect.

In either case, a further drop is much expected.

Whether oil could resume its uptrend and climb towards $115.72 is subject to a further observation.

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