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Corrections have been completed

Published Wednesday, August 20th, 2014

The contracts retraced further and these corrections provided opportunities to get back in the market for those who believe that the original trends are about to resume – in other words go long on ICE and short NYMEX natgas. The crucial M/A support/resistance have not been closed below/above so at the moment there is no technical reason to believe that the underlying trends are about the reverse their course. The picture could be different by tonight but at the moment ICE is still considered to be more on the positive and NYMEX on the negative side.

September ICE: The 8-day M/A support was tested yesterday. It was recommended to re-establish short positions here at 42.42 and has been broken below this morning. Fresh longs are now advised to keep a close eye on the 41.90/75 range support and the 41.70 level to protect their positions. The first two are the highs on the continuation contract on July 31 and August 1. The latter is where the 13-day M/A is. It does not seem unreasonable to liquidate half of any long positions on an intra-day break below this level and go completely flat if closed below. In that case the trend will turn bearish and lower numbers will be expected.

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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.