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“5 day gap” a bit wide – Down trend condition, sell rallies

Published Friday, October 10th, 2014

The contracts are in “melt-down” conditions. Old charts are being dusted off as it’s a long time since we’ve been at these levels – June 2012 to be precise in most cases. Targets lower are being hit. These are on WTI to 84.05; Brent 88.49; Heat 251.25/00; RBOB 220.80 (not hit yet but valid); and 729.00 Nov’ Gasoil – also not hit yet. Moves confirmed by closes (m/c) below these targets on the crudes and Heat would green light a further leg down on WTI to 83.34 (then 77.28); Brent to 82.30; and Heat to 245.71. The trend is down. It is not advised to be long. Sell rallies to resistance. A word of caution – the price action, for example, on Brent is currently about $2.50 below the 5 day MA. This “5 day gap” is too large and one should expect it to narrow and the only way that can happen is for the contracts to react up a bit. Sell this rally at resistance.

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Posted by Robin Bieber