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Both contracts are currently bullish

Published Wednesday, June 10th, 2015

We saw some a frisky performance on ICE where the initial strength turned only to finish the day on a positive technical note. There was no such uncertainty on NYMEX. This contract started to go higher in the morning and it never looked back. Bears have lost confidence in both contracts.

July ICE: It was recommended to start buying during yesterday morning and go fully long on a close above the 100-day M/A or cut losses on a close below the 43.31 range support. You had to have nerves of steel to hold on to intra-day long positions but at the end of the day the 100-day M/A, currently at 43.55 was settled above giving us a valid buy signal. As far as stop-loss is concerned there is no change from yesterday. It is advised to be conservative and take losses if 43.31 is closed below. In that case expect a fall down to the 8-day M/A which is at 42.82 at the time of writing. In the absence of such weakness targets on the upside are valid. It is the 100-day continuation M/A at around 45.72 where longs should try and run their positions to. It is some way above the current price action and the odds of reaching this level will increase if 44.17 is broken and closed over. This is the 61.8% correction point of the decline on the July contract from 46.00 to 41.19. Despite the slight morning pull back the contract is positive and will remain so unless the aforementioned 43.31 range support level is closed below.

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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.