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The complex failed at resistances yesterday but supports are also holding

Published Wednesday, January 21st, 2015

We were not provided with any clues yesterday about the next leg of the market. The contracts failed at resistances and settled lower but none of them have actually closed below support. The underlying trend is still undoubtedly down but we shall need to see a confirmation of this in the form of another weak performance today that actually takes the prices below supports at the close. On the upside the daily short-term M/A resistances and within that the 13-day M/As have been proved to be reliable guards that have been keeping bulls in check. These bulls will only get enthusiastic if the aforementioned resistances are settled over. These 13-day M/As are 48.53 WTI, 50.14 Brent, 168.23 Heating Oil, 133.53 RBOB and 477.25 Gasoil. It is RBOB that usually gives an early warning signal about the reversal of the trend therefore its 13-day M/A resistance is still the most important one on board. Should it be closed above the rest are likely to follow suit and head for their respective 13-day M/A resistances and on closes over them the odds of significantly higher numbers will grow. As things stand now this is the more unlikely scenario. Instead, we should see the nearest supports come under pressure and on a close below them the lows of last week are to be targeted.

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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.