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Everything is on hold

Published Thursday, February 5th, 2015

Three days of rally was followed by a massive sell-off which throws the validity of the developing uptrend seriously in doubt. Apart from Gasoil we had valid upside targets yesterday morning based on Tuesday’s bullish performance. These targets have obviously been put on hold and downside objective have not been validated either. It is too early to say that the plunge from yesterday will send the market back where it came from or the uptrend remains valid and it was just a brutal correction before the contract continues higher. What we know for sure is that it is reasonable to stay put today, at least during the day and let events unfold. By the close yesterday the daily M/As held on Brent, Gasoil and Heating Oil whilst some of them were closed below on WTI and RBOB. However, follow-through selling is pushing the prices below the M/A supports on Brent and Heat this morning whilst they are still holding on Gasoil. These M/As are the 5 and 34-day and they are the ones that should be used to decide whether it is worth getting back to the market from the long side. On a close over them it probably is and on such a move the highs of Tuesday will be in sight in the near future. These are 49.41 and 50.21 on WTI, 53.47 and 54.66 on Brent.

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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.