Technical & Fundamental Oil Reports Specialists

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Short-term M/As have been broken below

Published Friday, October 3rd, 2014

Taking a step back, eliminating the intra-day and daily noise and looking at the medium-term state of the two contracts reveal that none of them are trending. ICE seemed to be in a downtrend for the better part of September only to produce a mini-rally this week that came to an end yesterday and is confirmed by lower numbers this morning. NYMEX has been moving sideways since the end of July and when it seemed that we would witness an upside break-out this contract got sold-off on Wednesday and yesterday. Possibly the most important common feature of the contracts is that both of them broke and are still below the daily short-term M/As yesterday. This could mean that further weakness is on the cards and supports are going to be under pressure.

November ICE: This contract did not settle below the aforementioned M/A supports but further selling forced it below them this morning. They are between 56.08 and 56.82. This should mean that the 54.75 support, the daily low on Monday, will be tested. Should this support be closed below the July low on the November contract at 53.13 will be in sight in the not so distant future. This is pretty much the downside dealt with. If the market closed back over the highest of the daily M/As the test of the 100-day at 57.89 is expected to take place.

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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.