Technical & Fundamental Oil Reports Specialists

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It is now worth being flat and waiting for developments

Published Wednesday, January 7th, 2015

Is there no let-up in the downtrend? Seemingly not as the energy complex lost further value yesterday and venturing into territories not seen for more than five years this morning. The market is undoubtedly bearish and lower numbers are on the menu. This, on the other hand, does not mean that we just ought to close our eyes and keep selling short. As a matter of fact yesterday’s and this morning’s developments suggest that it would make sense being flat and only sell rallies to resistances or closes below supports. The technical reason to say this is that the nearest strong supports were hit on three out of the five main contracts. Whether this means that we shall see an upside correction today is anyone’s guess but should the market keep coming lower without any retracement there will still be plenty of opportunity to ride the underlying trend. The support is 50.75 on Brent, the monthly low in January 2007. A close below this support will green-light 44.09 as the next objective. It is the 50% c/p of the 1998-2006 uptrend.

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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.