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Watch the 8-day M/As on the upside.

Published Tuesday, August 25th, 2015

Both contracts lost values yesterday but neither of them fell down to important support levels. The technical features are still firmly skewed to the downside and supports are still expected to be under pressure. Since the September contracts expire the day after tomorrow we shall start concentrating on the October contracts.

October ICE: The formula seems straightforward on this contract. If you rolled your position over into October then it is advised to cover on a test of the 200-month M/A at around 38.78 or protect short positions on a break and close over the 8-day M/A resistance which is currently at 40.27. If you have not rolled yet then going flat is advised on a test of the 36.90 range support. It is the monthly low in August 2010. Short positions in the September contract also ought to be protected if or when the 8-day M/A is penetrated and closed above. This resistance in the front-month is about 38.94. In case the October contract closes below the 200-month M/A re-instating short positions is advised and on such a move those positions should be run to the 36.90 level. The market is recovering somewhat this morning but the trend is still down and will remain so unless the 8-day M/As are settled over.

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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.