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The 13-day are the most important resistances

Published Thursday, January 22nd, 2015

A quick look at the daily charts shows that the energy complex has been moving sideways for about a week now. It might be tempting to say that this consolidation has all the hallmarks of bottoming out although it would be very pre-mature to conclude this. It would be a very useful exercise to compare the current consolidation phase with the one we experienced in the first half of November. That time around the market could not make up its mind which way to go either for more than a week and then it decided to continue the prevailing trend and it resumed its downward move. What is interesting to notice is that during that period the 5 and 8-day M/As were occasionally settled over but the 13-day, with the exception of WTI for one day, were not. Here we are now with the 13-day M/As tested yesterday on WTI, RBOB and Gasoil but not closed above. It is inevitable to conclude that deciding to go long under these technical circumstances is a risky business. Of course, if the above-mentioned resistances are settled above, preferably for more than one day, the sentiment will turn and higher number will be on the cards.

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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.