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Test of resistances where the market could easily fail

Published Friday, February 6th, 2015

Three days of massive price rally was followed by a serious dump only to see the market partly make up for Wednesday’s lost ground yesterday. The next leg is still not entirely clear but we might see resistances come under further pressure today. The reason to say this is that all the daily short-term and the 34-day M/As were settled above yesterday again with the exception of the 5-day on RBOB. This resistance have been, however, broken above this morning. It also means that the with the exception of RBOB at the moment there is nothing wrong with being long in the other four contracts. This presents longs with a dilemma: where to take profit or where to cut losses? It probably makes sense to take profit on long positions when Tuesday’s highs are in sight. They are 54.24 on WTI, 59.00 on Brent, 187.47 on Heating Oil and 556.50 on Gasoil. Given that RBOB is over all of its daily short-term M/As it might be an idea to acquire some length on during the course of today and try and take profit on this contract at 158.04.

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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.