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Test of supports on both contracts

Published Tuesday, October 7th, 2014

With both contracts losing value yesterday and none of them challenging the daily short-term M/A resistances the chances are on further pressure on supports today. To be clear the contracts are still range-bound and only closes below the supports would mean that lower numbers are expected to occur.

November ICE: The daily low on the November contract on September 29 at 54.75 was tested and also closed below by a few points. Shorts therefore had the opportunity to cover their positions and they might have been tempted to sell short again on the close. They did so because now they expect the lower end of the trading range to be under pressure at 53.13, a range support and a daily low on July 10. An eventual close below the latter is very bearish.

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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.