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Support should be under continued pressure

Published Tuesday, July 21st, 2015

There is a consistency in the disharmony as the energy complex was true to its recent self. RBOB finished the day slightly up whilst the other four contracts all lost values. In a way yesterday’s performances helped us clarify the picture. The market is more bearish, supports are expected to be tested with the exception of RBOB. These supports are, in some cases, close to the current price action and closes below them are sells. On the upside a close above the 8-day M/As will turn the market neutral and going long is only recommended if the 13-day M/As are settled over. All of the above is true for each contract apart from RBOB. September WTI broke below the 50.95 range and headed straight to the next support area, the 49.90/69 range support level with a low at 50.15. These are the daily lows on January 13 and March 18. Should it be settled below the 48.71 and possibly the 47.80 supports will be targeted. Since the contract is negative an intra-day rally to the 8-day M/A is a sell but losses should be cut if closed over. It is at 51.79. Going long is only advised if the 13-day M/A at 52.50 is below tonight’s settlement level.

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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.