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Valid downside targets on both contracts

Published Monday, June 30th, 2014

None of the contracts had a particularly good week as they drifted lower and finished the period in negative territory. The nearest downside objectives have not been hit but the weekly losses indicate that they will be tested sometime in the foreseeable future.

August ICE: This contract did not quite get down to its 39.75 downside objective. This is the continuation low and double bottom on June 10 and 11. This support is expected to be under pressure today as the August contract takes over from July as the front-month. Short should cover when this support is tested and re-sell again if broken and closed below. Under this scenario the next support, another daily continuation low at 38.55 on June 9, will become the next target level. An eventual close below the latter is considered very bearish as in that case the market will likely fall down to the 200-month M/A that is currently at 36.34.

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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.