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Downtrend is very much intact

Published Monday, August 3rd, 2015

We started Friday by being short on every contract and the complex, with the exception of RBOB, did live up to its bearish expectations. Not only that but two of the contracts, Brent and Heating  Oil, broke and closed below significant support levels meaning that after taking profit on short positions fresh sell signals were given at the close. WTI and Gasoil tested support areas and if you did not manage to cover on Friday there has been a great opportunity provided to do so this morning. RBOB held up reasonably well but failed to settle over its nearest important resistance so at the moment there is nothing wrong with running short positions on this contract. It was said in Friday’s report that WTI bears should take profit on a test of the 46.67 range support, which is the weekly low at the beginning of February. It was the case and now these short positions are to be re-instated if closed below. In that case the 44.20 downside target, the weekly low in the middle of January, will be validated. Brent tested and closed below the 52.57/50 range support, the daily lows on March 16 and 17. Those who went short again on Friday evening should take profit when 50.00 is in sight or protect positions on a break and close over the 8-day M/A currently at 53.41.

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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.