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Supports were closed below on Friday – Both contracts look weak

Published Monday, March 24th, 2014

Bulls went home on Friday with their tails between their legs as there was no pre-weekend short-covering on either contract. Instead renewed selling pushed the prices lower and by the close both contracts closed below the next set of supports. In other words, both of them gave fresh sell signals.

April ICE: The support in question is the daily low on the April contract from February 26, which is at 55.71. This is the level that should be used to protect new short positions. Half of these positions should be covered on an intra-day break over this resistance and the other half on a close over it. In the unlikely event of such a move taking place a rally to sellable resistances is expected to take place. These resistances are the 8 and 13-day M/As at 57.52 and 57.83. A close over the 13-day will turn the technical picture bullish. The dilemma bears are currently facing is where to take profit.

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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.