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Both contracts are still more on the bearish side

Published Wednesday, July 9th, 2014

We foresaw upside corrections on both contracts and as it turns out we were half right. The ICE contract did go higher yesterday and kept advancing this morning whilst NYMEX weakened further, closed below its next support level and as such green-lighted the next objective lower.

August ICE: The contract corrected and is correcting upwards. It did not close over the 200-month M/A at 36.43 but is above it this morning and has also popped its head over the 5-day M/A which is currently at 36.53. At the moment this move higher is considered to be a correction in an otherwise down trending market. A close back below the 36.53/43 area would confirm this view. We might see further strength, possibly up to the 8-day M/A at around 37.42. Those who decided to go flat are recommended to re-instate short positions when this level is tested or when the 36.53/43 support is closed below.

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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.