Technical & Fundamental Oil Reports Specialists

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Test of supports is more likely on both contracts

Published Thursday, March 27th, 2014

Resistances were not closed over yesterday therefore the risk remains on the downside. This might change today but at the moment there is no technical reason to believe that the contracts will go higher. We shall start concentrating on the May contracts. On both ICE and NYMEX the front-end structure is very close to flat therefore supports/resistances are similar to the current front-month.

May ICE: All this contract managed on the upside was a half-hearted test of the 5-day M/A resistance currently at 54.56. After testing the 54.02 monthly c/p support on Tuesday, yesterday’s strength is seen as an upside correction. The market is weakening again this morning and it would probably make sense to go short on an intra-day break below 53.43. This is another monthly retracement level – the 38.2% c/p of the November 2005-April 2007 downtrend. If or when this support is broken below it will most likely head towards the monthly range support at 53.00 where short covering is recommended. A close below 53.00 is a sell again. In that case the 51.74 range support will become the next downside objective.

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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.