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Possible upside corrections

Published Tuesday, July 8th, 2014

The downward march continued on both contracts yesterday. All the daily short-term M/As are above the price action and the daily slow stochastics are negative. The trend is down. It is, however, not inconceivable to see upside retracements on both contracts today as ICE is trading higher this morning and NYMEX hit its next support level but did not close below it.

August ICE: The downside objective is still valid on this contract. It is 33.45, the monthly low in February 2009. The odds of hitting this target will jump if yesterday’s low of 35.10 is broken and closed below. It might not happen today as the market is climbing higher. Upside retracements are natural phenomena in a down-trending market and this is what we might be seeing at the moment. The downtrend will remain intact unless the 200-month M/A at 36.42 is settled over.

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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.