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13-day M/A is crucial on ICE. Support is to be tested on NYMEX.

Published Wednesday, August 26th, 2015

October ICE: Neither the 36.90 range support and monthly low on the September contract nor the 200-month M/A at 38.79 on the October one were in sight meaning that shorts did not have the opportunity to cover. To their relief the 8-day M/As were not settled above either; therefore, they are likely to have gone home short last night hoping for lower levels this morning. It has not been meant to be. The market opened with an upside gap, above the 5 and 8-day M/As (40.09 and 40.23 respectively) and is testing the 13-day M/A which is presently at 40.71. It makes sense to be prudent and go flat and from there onwards do nothing today until the close. If the 13-day M/A is settled over going long is advised for a rally up to 41.69 in the near future. It is the 38.2% retracement level of the July-August downtrend on the October contract. A close back below the 8-day M/A is a sell and on such a move the October contract is expected to have a serious go at the 200-month M/A support. In other words a close below the 8-day is bearish, above the 13-day is bullish and in between the two the technical picture is neutral.

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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.