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Downside pressure on ICE and patience on NYMEX

Published Monday, January 19th, 2015

February ICE: The strong support was tested but not closed below on Friday. The support in question was the continuation high at 45.55 reached on June 16. Friday’s price action gave market players a chance to short the contract on an intra-day basis and also to take profit on the same day. Since the support was tested but not closed below it did not make any sense to short the contract on the close. This morning further weakness is pushing the price lower and Friday’s strategy could be employed. We are not only below the 45.55 range but also the 45.20 support. The latter is the recent continuation low on January 7. It might be an idea to start selling short and put on the full position at the close provided 45.20 is settled below. In that case the next objective on the downside is 43.75, the continuation high on July 29.

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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.