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Targets have been hit on both contracts – Patience now

Published Wednesday, June 4th, 2014

Bulls of the NYMEX contract are probably as happy as bears of the ICE contract as the targets have been achieved on both. NYMEX tested its resistance yesterday and did not close above it. ICE has fallen down to its support this morning providing shorts with an opportunity to go flat and wait for developments. The trend is still up on NYMEX and down on ICE but now we have to see confirmations of this view.

July ICE: The low of today is 41.80 at the time of writing. The downside target has been the 41.75 range support, the monthly high from January 2010, close enough for shorts to cover. A close below this support is a sell. In this case half of the position should be closed out on a test of the 41.00 range support. This is the continuation low from last week. The other half should be covered either on a close back over 41.75 or on a test of the 40.35 support. The latter is the 61.8% retracement level of the August 2009-March 2013 move up from 18.20 to 76.15.

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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.