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Watch the 13-day M/As on both contracts

Published Wednesday, October 29th, 2014

Both contracts rallied yesterday but neither of them settled conclusively over all of the daily short-term M/As. ICE closed above the 5 and 8-day whilst NYMEX found the 8 and 13-day M/As hard to overcome. Since the underlying trend is down both on ICE and NYMEX yesterday’s strength can be viewed as an inevitable and obvious correction and as such a sell. Those who decided to sell short are strongly urged to keep a very close eye on the 13-day M/As and cover short positions if these resistance are broken and closed over. On such closes they should not only take losses on short positions but also contemplate going long.

December ICE: This contract has already popped over the 13-day M/A resistance this morning that is at 56.30 at the time of writing. It might be an idea for shorts to start scaling back and only re-instate the full position if the 13-day M/A is closed below. In that case the 55.40/35 range support will be tested, especially if the 5 and 8-day M/As at around 55.97 and 55.95 were broken and closed below, too.

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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.