Technical & Fundamental Oil Reports Specialists

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Sell rallies to resistances

Published Wednesday, July 29th, 2015

All the daily short-term M/As are still above the price action. All the daily slow stochastics are still negative. The downtrend, therefore, is still intact despite WTI, Heating Oil and Gasoil gaining a tiny bit of the lost ground. Those who were short on RBOB and Gasoil had the opportunity to go flat as supports in these contracts were only briefly broken but not closed below. It was advised to be flat in Brent and Heating Oil so the only short positions that should be run now is in WTI where profit is expected to be taken if or when the 44.20 range support, the continuation low on January 13, is in sight or positions protected on a close above the 8-day M/A at around 48.79. As for the rest closes below supports or rallies to the 8-day M/A resistances or in the case of RBOB to the 200-day contracts M/A are sells. There is a strong case that it is the latter that will take place today for two reasons. The first one is that Brent did not close below its 52.57.50 range support. Such a close would be very bearish. The second one is that Heating Oil failed to settle below the low of the last 5 years at 158.90. An eventual close below this support is extremely bearish. These levels held therefore we could get a serious upside retracement up to sellable resistance. As said above, these are the 8-days M/As at 54.95 on Brent, 163.63 on Heating Oil and 503.00 on Gasoil.

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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.