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Supports are expected to be under serious pressure

Published Tuesday, March 18th, 2014

The market completely fell out of bed yesterday. The targets on products – 290.64 Heat, 291.85 RBOB and 890.00 Gasoil – that had been hit but held on Thursday were all closed below yesterday. Additionally, WTI closed below the 50% correction point of the recent uptrend at 98.35 and Brent settled below the 61.8% retracement level of the same move up, which is at 107.21. If you consider that all the short-term daily M/As are above the current price action then it would take a brave technician to paint a bullish picture. Yesterday’s meltdown also means that there are targets below the market. These targets, in some cases, are close to the present price level so those who are short might only bank a small profit if or when the next set of support areas is tested but it is better to be on the safe side. On the other hand, eventual closes below these supports will be considered very bearish. Take WTI, for example. The 100-day continuation M/A is at 97.27 and the 100 and 200-day contract M/As are both at 97.19.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.