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Be flat on ICE. NYMEX gave a buy signal.

Published Friday, September 4th, 2015

ICE had another go at the resistance area but did not settle over it. NYMEX did its best to break below the crucial support area but not only did it fail but actually rallied aided by the weekly EIA report on US inventories and closed over the 13-day M/A resistances giving us a buy signal.

 

October ICE: The 38.2% correction point at 41.69 was not closed above let alone the 34-day contract M/A around 41.90. Unless these levels are below the settlement price the contract is deemed to be neutral. On a close above the 34-day M/a, however, going partly long is advised with putting full length on only if the 100-day continuation M/A currently at 42.24 is firmly broken and settled over. In that case the market should be heading to the gap on the October chart on August 3 at 43.30 with the potential to jump as high as 44.25, the continuation high on July 10. The downside is straightforward. The adventurous ones might feel tempted to buy on a dip to the 8-day M/A support at around 40.97 for a rally back up to the aforementioned c/p. Should the 13-day M/A at 40.65 be penetrated and closed below longs should not only liquidate but also sell short as on such a move the recent low on the October contract at 39.40 ought to be re-visited.

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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.