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Target is the 200-month M/A on ICE. Be flat on NYMEX.

Published Friday, August 14th, 2015

Yesterday was business as usual on ICE as the contract drifted lower after giving a sell signal on Wednesday. It is still fairly far from its downside objective but at the moment we do not see any technical reason to change the bearish view. NYMEX is a different beast. Once again it shied away from the level where longs were supposed to close out the remainder of their positions and the EIA stats seriously dented their confidence. It is highly recommended to be neither long nor short in this contract.

 

September ICE: The 200-month M/A at around 38.79 is still expected to be tested in the coming days. The market closed below the recent lows of 40.20/11 so the view on testing the nearest downside target has only gotten stronger and it will be held unless the 8-day M/A at around 40.55 is settled above. Under the latter scenario shorts should go flat as in that case the 13-day M/A resistance might be tested. It is at 41.14 at the moment and a rally up to here is a sell. It is, however, the more unlikely possibility. Instead we should see weaker numbers. Weekly technicals are negative, too and a close below last week’s low of 40.45 will confirm this.

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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.