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Be flat on ICE – Test of resistance on NYMEX

Published Wednesday, May 6th, 2015

Supports were not in sight on ICE whilst the NYMEX contract shied away from its nearest resistance area. It is recommended to be flat on the former but no supports were settled below on NYMEX therefore keeping existing long positions is not unreasonable.

June ICE: Since the 42.06/10 resistance level was settled over shorts were supposed to go flat taking a small loss. The 5 and 8-day M/As were also closed above therefore it is not surprising to see the 13-day coming under pressure. Not only is it under pressure but also below the price action. This M/A is currently at 42.49 and a close over it will effectively mean the end of the downtrend that started at the beginning of April. Such a move is a buy and length should be run up to 43.54, the 34-day contract M/A and to 44.18, the 100-day contract M/A. The jury is still out whether yesterday’s rally was a bull trap or a genuine change of heart but it is highly recommended to re-establish former short positions in a hurry if 42.10/06 is closed below today. In that case the former downside objective at 40.49 will be validated again.

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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.