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The contracts are negative but they might retrace today

Published Friday, June 27th, 2014

Both contracts lost value yesterday. They are below their respective daily short-term M/As. They have targets below the current price levels. They are negative. They are expected to hit their targets on the downside but it might not happen today. Being Friday we could see an upside correction but this should not take the contracts above the lowest of the daily short-term M/As. These are the 5-day M/As on both contracts


August ICE: This contract closed lower but could not get down to its 39.75 downside target, the continuation lows on June 10 and 11. This target remains valid. Shorts are recommended to take profit when tested and re-sell on a close below that. In that case we should see a quick fall to 38.55, another continuation low and range support. The downtrend will remain intact even if we see some pre-weekend short-covering provided that the 5-day M/A at around 40.79 and the 41.00 range resistance are not closed above. If they were then it is recommended to go flat and sell short again on a test of the 8-day at 41.27

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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.