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Supports held but downtrend is still intact

Published Wednesday, July 8th, 2015

Yesterday saw some erratic trading as the energy complex strengthened during the London morning only to have a serious go at supports in the afternoon. However, a late rally helped the contracts settle strongly. This morning the market is weakening once again. Amongst this hectic performance one thing is clear. That is that the risk remains to the downside. Our exciting fundamental world can change this sentiment in a second and the market could turn positive again but as far as current technicals are concerned the daily slow stochastics are negative and the daily short-term M/As are all acting as resistances. These provide us with a bearish backdrop. The negative sentiment will likely prevail unless the lowest of the daily short-term M/As, the 5-day, are closed above. They are presently 54.06 WTI, 58.38 Brent, 175.84 on Heating Oil, 197.34 on RBOB, very close to the 200-day at around 197.25 and finally 540.50 on Gasoil. A rally up there is a sell but these fresh short positions ought to be protected if or when they are closed above. On the downside three out of the five contracts hit its strong support areas and bounced back off from there.

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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.