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C/p resistances are the next upside targets

Published Wednesday, February 4th, 2015

The buying spree continued yesterday. It was established that four out of the five contracts had closed over resistances on Monday and it was only WTI that had to negotiate its 34-day M/A resistances in order to get a buy signal. Well, we had that as the NYMEX benchmark closed firmly over these resistances that are currently at 50.58 and 50.25. WTI longs are recommended to use this support area to protect long positions. A close below the 34-day M/As would probably mean the end of the three-day rally and would push the contract down to the short-term daily M/As that are between 49.54 and 47.59. Otherwise these longs should try and run their positions up to the 38.2% retracement level of the November-January downtrend that is at 56.65 and re-establish long positions if closed above. Brent did not quite get up to its nearest crucial resistance so longs are probably still long. They are confident that the correction point at 60.20 will be in sight sooner or later and this is where they are planning to take profit. These longs will not get concerned unless the 5-day M/A at around 54.51 is closed below in which case they will start scaling back on their length.

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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.