Technical & Fundamental Oil Reports Specialists

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Both contracts have targets below the current price levels.

Published Monday, August 24th, 2015

It appears that the contracts are parts of the general commodity rout as they have been trading lower since the last report was published. Over the course of last week both of them gave genuine sell signals and started to test supports providing shorts with opportunities to cover partly or fully short positions and even sell short again. Now let us see the concrete numbers.

September ICE: A little over a week ago we were short in this contract and the recommendation was to cover if or when the 200-month M/A is in sight. This very long-term M/A is at 38.78 and it was duly tested last Wednesday with a low at 38.90. Not only it was tested but also closed below the following day so those who took profit on short positions had the possibility to go short again. Friday rally was not strong enough to dent the bears’ confidence; shorts are still short. The question is where to take profit and where to protect these fresh positions. Well, the answer to the first question is that after the 38.78 level was settled below the next downside target, the monthly low in July last year at 35.10 has been validated. It is all well but it will not be a plain sailing to get down there. It is, therefore, advised to take profit when the monthly low in August 2010 at 36.90 is approached and sell short again if closed below. Current shorts should only start getting concerned on a break and close above the 8-day M/A at around 39.19.

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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.