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Test of resistance on ICE – NYMEX is range-bound and on holiday.

Published Friday, July 3rd, 2015

August ICE: We saw some follow-through buying yesterday after this contract had settled above its daily short and medium-term M/As on Wednesday. This buying spree, however, was not strong enough to send the price of the contract up to its nearest upside target. It is the 43.60.62 range resistance area. The sentiment is still positive and this objective is expected to be reached in the near future. If this view is justified and the contract does strengthen further then longs are advised to buy again on a close above the 43.78/80 level. This is the area of the 100-day M/A and a range resistance. The test of the aforementioned upside objective will look certain on an intra-day break over yesterday’s high of 43.30. Current longs are advised to protect their positions if the 34-day contract M/A at around 42.37 is broken and closed below.

August NYMEX: Probably book-squaring ahead of the long US weekend was responsible for the small rally in this contract. The technical picture from yesterday has not changed. The bottom end of the range, below which it is still recommended shorting the contract, is 2.737/33. Intra-day dips there are probably buys but no long positions should be held if closed below. In this case longs are recommended to take profit around the 34 and 100-day M/A at 2.831 and 2.843 only to go long again if the top end of the narrower range at 2.866/69 is settled above. In that case further strength up to the 2.977 range resistance should take place where it is advised to go flat again.

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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.