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Supports are expected to come under pressure

Published Friday, March 20th, 2015

It seems that Wednesday’s encouraging price strength was misleading; it appears that it was a bull trap and it is likely that supports will now come under pressure. This is the current view despite there being a conflict between the daily short-term M/As and the daily slow stochastics in that the former indicators are above the price action in most cases, ie. they are bearish whilst the oscillators are still pointing north suggesting firmer numbers to come. Apart from Wednesday’s strength, however, the prevailing trend has been down and this is why the odds are stacked towards softer levels. Every contract settled below the 13 and 8-day M/As and Brent and WTI are also below the 5-day whilst the product contracts are testing these supports. WTI could now re-visit the recent low of 44.03 and on a close below this support the continuation low on Wednesday at 42.03 will be the next objective. The current negative sentiment will only evaporate on a close back over the 8-day M/A resistance at around 46.88.

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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.