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Rallies to M/As are sells

Published Wednesday, June 25th, 2014

August ICE: The July contract did not get down to its downside target of 38.55. Maybe it failed to do so because the front-month expires on Monday and now attention is being turned to August. The 38.55 target is the daily low on June 9. If you look at the August chart you’ll find that this contract, on the other hand, tested the same level. It is at 41.00. It held but is being put under pressure again this morning. It is probably best to think about selling short again if this level is closed below or when yesterday’s low of 40.65 is broken below during the course of the day. In any of these two cases the next objective on the downside is found on the continuation chart. It is the double-bottom and the daily lows on June 10 and 11 at 39.75. A close over the 5-day M/A (41.46) would likely mean a rally up to the sellable 8 and 13-day M/As at 42.10 and 42.27 respectively.

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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.