Technical & Fundamental Oil Reports Specialists

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The trend is down but upside correction is possible today

Published Friday, July 24th, 2015

Further selling pushed prices lower yesterday and the price action confirmed that the downtrend is intact. The daily short, medium and long-term M/As are all above the current price action (RBOB 200-day is the exception) and this supports any bearish view. Some strong supports, however, held or were not conclusively settled below which means that it is not unreasonable to expect some kind of upside correction today. This, however, does not mean that it is recommended to go long. Any upside correction is viewed as an opportunity to sell short.

WTI: Closed below 49.90/69 on Wednesday and has a target at 47.80. Shorts are advised to take profit there and sell again if closed below. These positions should be protected on a close above the 8-day M/A at around 50.24 and going long only makes sense if the 13-day M/A at around 51.28 is settled over.

Brent: It closed below the recent low on the September contract at 55.60 and this move green-lighted the next target, the 53.19 range support. It is valid as long as the 8-day M/A at 56.47 acts as a resistance. It might be an idea to take profit on part of any short positions when 54.46 is in sight. This is the weekly 61.8% c/p of the January-May rally. The odds of testing this support will jump on a break below yesterday’s low.

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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.