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Test of supports are more likely

Published Monday, January 12th, 2015

Both contracts ran up to their strong resistance levels – ICE more so than NYMEX- but they did not close above them. It was recommended in Friday’s report that under these circumstances it is worth shorting the contracts. This view is still held and shorts are advised to use the resistances from Friday as a stop for their fresh positions.

February ICE: The resistance in question is the 47.18 correction point level. This is the 50% c/p of the 2009-2013 uptrend. Those who shorted this contract on Friday did not quite have the chance to take a quick profit as the market did not fall down to the 45.55 range support but bottomed out at 45.90. This morning we are experiencing some strength but the aforementioned c/p resistance is still above the price action. Shorts are likely to cut their exposure if 47.18 is broken over and they should go flat if closed above. On such a move the 13-day M/A, currently at 49.24 will be shortly in sight.

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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.