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No resistances were closed above yesterday

Published Tuesday, May 20th, 2014

The headline sums it up. The contracts are still more on the negative side as they both strengthened somewhat yesterday but it was not enough to change the underlying sentiment. The only change compared to yesterday morning is that it probably makes more sense to be flat on the NYMEX contract than to be short and look for levels to re-instate short positions.

June ICE: Bears are probably relieved that the 44.70 range resistance proved to be too strong to be settled above. It was broken over during the day but selling towards the end of the day pushed the price below this resistance. In other words the strategy does not have to be altered. If 44.70 were closed above tonight it is recommended to get rid of short position only to put them back on if the 13-day M/A resistance at 45.46 is approached. Only a close over the latter would mean the end of the current downtrend that started in the middle of April.

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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.