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Supports are expected to come under pressure

Published Monday, June 22nd, 2015

We singled out the 13-day M/As on both contracts on Friday as the ones that could set directions. This view proved to be justified on ICE but seemingly misplaced on NYMEX. It was closed below on ICE and this contract is duly weakening further this morning. The 13-day M/A was settled over on NYMEX but the price is much softer this morning and is now way below the 13-day M/A.

 

July ICE: After the failure to break and settle over the 13-day M/A this contract has fallen below the 5 and 8-day M/As this morning (42.26/29) and is on its way to test the 41.80 and 41.60 range supports. The former is the daily low on the July contract on May 5 and the latter is the daily low last Thursday. Shorts are advised to take profit when these levels are tested and only sell short again on a close below the 41.19/41.00 range support area. Should the lower of these be settled below bears will be in full control of this contract. New shorts will only get concerned on a close back above the 5 and 8-day M/As. In that case half of their positions should be covered and going flat or even long is recommended if the 13-day at around 42.61 were settled above. Under the latter scenario the market will turn bullish and higher numbers will be in order. At the moment technicals are negative and supports are expected to be tested today.

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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.