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Patience needed on both contracts

Published Tuesday, January 13th, 2015

February ICE: Supports were not tested and resistances were not closed above yesterday. What a difference 12 hours can make. This morning the contract is considerably higher and more importantly it is above the long-term correction point at 47.18. It was recommended in yesterday’s report to cut losses if this resistance is settled over. This recommendation has changed this morning. Such is the strength we are currently experiencing that it makes sense to cut losses on short positions during the course of the day and wait for developments. Should the 47.18 level be closed back below for whatever reason this rally will prove to be a bull trap. Such a close is a sell and in that case the 45.55 downside target will be validated again. It is, however, the more unlikely scenario. Instead we should see the test of the 13-day M/A at around 48.88.

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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.