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Further down on ICE and up on NYMEX

Published Thursday, August 13th, 2015

ICE finally settled below its crucial support area giving us a sell signal. Further downside pressure is anticipated on this contract. NYMEX tested, penetrated and closed over its nearest resistance but shied away from the next one. Some profit should have been taken on existing long positions and further strength is expected on this contract.

 

September ICE: Last night’s settlement was the lowest ever on the September contract and the lowest for a year on a continuation basis. It was bearish, especially considering the fact that the 40.45/35 range and monthly c/p support was above last night’s settlement. The next target south has been validated – the 200-month M/A currently at 38.79. The odds of reaching this target will be much higher if the lows of Monday and yesterday were broken and settled below. These are 40.11 and 40.20. And where to protect these new short positions? Logic dictates that part of it should be covered on an intra-day break above the 41.29/35 level, the former range support and the 13-day M/A and going flat would make sense if the 8-day M/A, currently at 40.75 and yesterday’s high at 40.80, were settled back over. As all the daily M/As are acting as resistances and the daily slow stochastics is negative this is the more unlikely scenario. Instead, expect further weakness.

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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.