Technical & Fundamental Oil Reports Specialists

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Negative whilst below the 5 and 8s – Look for dip to the 13s

Published Thursday, June 26th, 2014

My worries about further upside being in doubt on Wednesday mainly centered around the lack of technical harmony. We were (and are) in an up-trend, with a price punch-up occurring around the 5 and 8s but the stochastics had all flipped negative. The negative stochastics yesterday (and today) made any rally very hard work and the action around the 5 and 8s would provide the clues. By last night all contracts – less WTI – had failed at the 5 and 8s and had closed below. This is short term negative and suggests more of a slingshot (s/s) correction in this up-trend down to the 13s. In short, the up-trend is losing upside momentum and we should now see a dip to the 13s. This view is valid whilst below the 5 and 8s. WTI is the only contract above the 5 and 8s, which are support around 106.44 and 106.21 – it is ok whilst above these two and should put the resistance at 106.84 under pressure. It needs a move and close (m/c) over here to green light the next leg up to 107.50. Failure to hold the 5 and 8s would point to another leg down to the 13 around 105.78, and only a close below here would be bearish and a sell.

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Posted by Robin Bieber