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ICE should test support – Watch the 34 and 13-day M/As on NYMEX

Published Friday, July 24th, 2015

Both contracts shied away from getting near to their respective targets yesterday. ICE natgas had a downside objective, however, yesterday’s mild strength did not take this contract above resistances so this target is still valid. NYMEX, on the other hand, rallied but turned 20 odd points below its resistance objective and closed below supports. It is recommended to be flat on this contract and wait for developments.

 

August ICE: This contract turned higher at 41.84, 28 points away from the nearest support and downside target of 41.56. This is the daily low on the August contract on June 18. Should it be approached it is advised to cover and then wait. Re-selling is only logical if the continuation low on May 26 at 41.29 were settled below. Such a close will green-light the next target, a weekly correction point support at 40.35, with the potential to go down to the 200-month M/A at 38.65. In case the contract refuses to go lower the price action around the 34-day M/As (42.77/88) will tell us whether it is reasonable to protect short positions. The contract is currently still negative. It will turn neutral on a close over the 34-day M/As and bullish if the 13-day M/A at 43.12 is broken and conclusively closed above.

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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.