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Published Tuesday, May 19th, 2015

Both ICE and NYMEX settled lower yesterday but the former did not close below its nearest support area therefore had no chance of testing its downside objective whilst the rally on the latter ran out of steam during the London afternoon so longs had no chance of taking profit. Since there is no fresh development on either contract all we can do below is to re-iterate the profit-take and stop-loss levels that are more or less unchanged from yesterday.

 

June ICE: The 42.10/42.06 range support was not closed below yesterday but has been broken this morning. The odds of testing the 41.30 objective have grown. The low, so far, has been 41.60, not close enough for shorts to cover. It is recommended to go flat just above 41.30 and re-sell if closed below for further weakness down to 40.49. Protecting short positions seems straightforward. The daily short-term M/As are clustered together and they are between 42.38 and 42.48. Losses should be taken on a close above them. This is the more unlikely scenario. Since 42.10/06 is now acting as a resistance the odds are on the eventual test of the 41.30 support.

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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.