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Further pressure on supports

Published Monday, July 27th, 2015

There was no pre-weekend short-covering as the energy complex drifted lower on Friday. There was a great opportunity provided on WTI for shorts to cover. Brent bears had the possibility to take profit on part of their short positions, Heating Oil shorts are still running their positions whilst Gasoil and perhaps most importantly RBOB closed below supports levels meaning new sell signals on these contracts. In a nutshell, the trend is still down and supports are expected to come under pressure, although an upside retracement can happen any time now. This correction could push the price up to the 8-day M/As. This rally would be seen as a selling opportunity and shorts are only recommended to protect their positions if they are closed above. In that case the technical picture would turn from bearish to neutral. Going long is still only advised on closes over the 13-day M/As which are some way above the market.

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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.