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Resistances are under pressure

Published Wednesday, January 21st, 2015

February ICE: Since the expected test of support did not take place shorts are most probably still in place. The support in question is the continuation high on July 29 and is at 43.55. The contract bottomed out at 44.00, not close enough to cover short positions. This morning fresh buying is pushing the price of the contract to resistances. The nearest one at 45.09/22 has already been tested. The former is the 61.8% correction point of the weekly uptrend from July to November 2014 and the latter is the contract low on January 7. On a break over this area the contract should head towards the 45.50/55 level. This is the 5-day M/A and the continuation high on June 16. It might be an idea to cut short positions on a break over this level and go flat if closed above. A failure to settle above these resistances would mean that the downside objective at 43.55 remains valid. It is not entirely clear whether the contract has turned or not. The price action around 45.09/45.55 will give us the answer to this question

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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.