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Supports held yesterday – We might see upside retracement today

Published Friday, May 2nd, 2014

There are quite a lot of technical issues to deal with after yesterday’s closing prices. The final conclusion after analyzing the latest developments is that shorts have probably taken profit, they are square and they would probably not think to re-establish their positions today unless resistances are tested but not close above. The reason to say this is that each contract saw strong supports tested yesterday and even broken below in some cases but by the close the market closed above them. This is why shorts should be flat. All the daily short-term M/As are still acting as resistances therefore the trend is still down. Additionally, the daily slow stochastics are negative. This should mean that intra-day rallies to these resistances are sells. However, we have a long week-end coming up here in the UK therefore some kind of short-covering might be the order of the day from those who decided to hang on to their positions yesterday. There will be nothing wrong re-instating short positions if a.) the M/A resistances are tested over the course of the day but not closed above or b.) if the supports that held yesterday are above tonight’s closes in the absence of any upside retracement. Below we list each contract with their respective support below which it makes sense to go short again and the M/A resistances which must not be settled above in order to maintain the underlying negative technical view.

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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.