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NYMEX is still bearish – On ICE watch the 8-day M/A resistance

Published Wednesday, December 10th, 2014

The contracts corrected to the upside but there was a difference between the two performances. Whilst the NYMEX contract did not settle over resistances and shorts are still probably short, the ICE contract broke and settled over its crucial resistance area. It is, therefore, recommended to be flat in the latter and look for levels to short this contract again.

January ICE: The downside objective, the 53.45 range support was not quite tested yesterday as this contract turned at 53.80. The rally that followed took the price over the 54.91/94 range resistance area. Shorts were advised to go flat if such a close had taken place and they probably did so. At the time of writing the 5-day M/A at around 55.40 and the 34-day continuation M/A at around 55.38 are below the market but the 8-day M/A at 55.98 is still acting as a resistance. Additionally, the daily slow stochastics has not flipped convincingly positive yet, it would probably only do so if the 8-day M/A were settled above. So, what should be the strategy for today? On an intra-day rally to the 8-day M/A it is probably reasonable to start selling and go fully short if this resistance is not closed above.

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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.