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ICE is still negative. There is nothing to do on NYMEX.

Published Wednesday, May 20th, 2015

ICE could not quite get down to its nearest downside target but did not close over assorted M/A resistances either. For this reason shorts should still keep their positions and expect further weakness today. Longs in the NYMEX contract were provided with the opportunity to go flat before the contract collapsed. Patience is the motto for today on this contract.

 

June ICE: The downside target mentioned above is 41.30. It is a range support and the lowest print on the June contract on May 5. Shorts are highly recommended to cover when this level is in sight and only sell short again if or when closed below. In this case the 40.49 support, the daily low on the June contract on January 20, will become the nearest downside target. The test of the 41.30 level is still likely as the 42.06/10 range support was closed below for the first time since May 8. If this bearish view is unjustified then those with short positions on are advised to take losses on a close above the 13 and 8-day M/As that are currently at 42.39 and 42.48. As a matter of fact such a move is a buy and further strength will be expected. Under the current technical circumstances this is unlikely to happen and instead the eventual test of the 41.30 support should take place.

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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.