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Targets have been hit on both contracts; Wait-and-see

Published Wednesday, April 30th, 2014

The headline sums it up. Both contracts tested their respective targets but they were not closed below/above. ICE shorts should be flat now and so should NYMEX longs. Closes below supports or rallies to resistances are sells on ICE and vice versa on NYMEX. ICE is still bearish, NYMEX is still bullish but we need confirmations that the underlying trends will continue.

 

June ICE: The contract broke and closed below the 47.40 level. The June contract is now at the lowest ever level whilst on a continuation basis it is at levels not seen since November 2011. The picture is negative but there is one more support to overcome in order to re-establish short positions. It is 47.18, the 50% retracement level of the August 2009-March 2013 uptrend. A close below this support will green-light the next long-term target. This is the 61.8% c/p of the same move at 40.35 with weak-ish supports higher at 45.50 at 41.75. A rally to the 8-day M/A resistance at 48.59 is also a sell but on a close above the 49.20 range resistance it is recommended to cut losses.

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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.