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Further pressure on supports

Published Tuesday, July 28th, 2015

The downtrend continues. The players might change but the game remains the same. By that I mean that whilst yesterday morning some contracts were expected to test supports where taking profit on short positions was recommended, others had already gone flat and fresh sell signals were expected on closes below supports. These moves duly happened and in the contracts in which it was advised to be short we should now be flat and vice versa. It was recommended to sell short on WTI on a close below the 47.80 range support, the weekly low at the end of February. It now has a valid target in the form of 44.20,  the daily continuation low on January 13. It is valid unless the 8-day M/A at around 48.96 were settled over. In that case the contract will turn neutral and going long is only advised if the 13-day at around 50.40 is closed above. On Brent there was an opportunity to go completely flat as the 53.19 range support was briefly broken but not closed below. As a matter of fact selling short now is only logical if the 8-day M/A at around 55.48 is tested or if 52.57/52.50 is closed below. This is a range support area made up by the daily continuation lows on March 16 and 17. Such a move is a sell for a dump to below 50.00.

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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.