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ICE is negative but NYMEX should test resistances

Published Tuesday, May 5th, 2015

We went into the weekend feeling bearish on the ICE contract and bullish on NYMEX. These views were somewhat confirmed as ICE settled a touch lower on Friday (it was closed yesterday), whilst NYMEX natgas gained further ground on Friday as well as yesterday. Neither of them went very close to their respective support/resistance targets level but the tests of these areas are still expected, if not today then in the coming days.


June ICE: The 42.10/06 range support was closed below on Thursday giving us a fresh sell signal. The move green-lighted the next target on the downside which is another range support, the daily low on the June contract on January 20 and is at 40.49. This is where shorts are recommended to cover and only re-sell if closed below. Current short positions ought to be protected if the contract settled back over 42.06 and 42.12. This is where the aforementioned support-turned-resistance area is together with the 8-day M/A at 42.12. On a close over this area the technical picture would turn neutral-to-slightly-bearish. On such a move it is recommended to go flat but only to re-establish short positions on a test of the 13-day M/A resistance that is currently at 42.50. The contract would only turn bullish if the latter resistance were settled above. Currently lower numbers are expected and the 40.49 range support is anticipated to be approached in the not so distant future.

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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.