SINGAPORE: US oil may retest a support at 81.20 per barrel, a break below could open the way towards $79.17.

The contract is riding on a wave 3 from $87.76, which is expected to extend to $79.17, as it has travelled far below $82.45.

A head-and-shoulders developing from the Aug. 16 low of $85.73 suggests the same target.

The current bounce is regarded as a pullback towards the neckline of the head-and-shoulders.

The pullback may have completed, after oil failed to break $84.48.

US oil may test resistance at $89.17

A break above $83.17 may lead to a weak gain into $83.70-$84.48 range.

On the daily chart, oil broke a key support of $86.11.

The break confirmed an extension of a wave (C) from $123.68, which wave may travel into $62.89-$71.76 range.

Another projection analysis marks a realistic target is $78.08.