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RBOB 200-day M/A support is crucial

Published Thursday, July 23rd, 2015

To a certain extent the market lived up to its bearish expectations. Supports were tested on Brent and RBOB and they held. We saw surprising relative strength in Heating Oil and Gasoil with no supports seriously challenged. WTI was the only contract yesterday that broke and settled below supports and validated the next target on the downside. It closed below the 49.69/90 area, the daily lows on January 13 and March 18 and also below the 61.8% continuation correction point of the March-May uptrend at 49.88. It should now fall down to 47.80, the weekly low in February this year. This objective will remain valid unless the 49.69/90 area is settled back over. Brent went 30 odd cents close to its 55.60 range support and recent low and is expected to put this level under pressure again today. A close below is a sell and in that case there is nothing really that could stop this contract from falling down to 53.19, the daily low in the August contract on January 13. A rally and close above the 8-day M/A currently 56.96 will turn the sentiment neutral.

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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.