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Bullish trend is developing although not conclusive yet

Published Wednesday, September 23rd, 2015

Introduction. It is now not unreasonable to expect higher prices for several reasons. The most important one is that RBOB closed above its 34-day M/A and although it is back below this resistance at the time of writing the bullish sentiment would only turn again if tonight’s settlement were below this level. As for the rest supports held during the initial and short-lived weakness in the early hours of yesterday. By the close some of the daily short-term M/As were settled over suggesting that resistances will come under further pressure later today. This view is somewhat confirmed by the generally positive status of the daily slow stochastics.

WTI: on a break and close above the 5-day at 46.34 the test of the 48.07 range resistance is expected. A close above the latter is unreservedly bullish and in that case the end-August high at 50.04 is where the bar will be raised. Bears will only be in control again on a close below the 43.99/89 range support area.

Brent: it closed above the short-term M/As (they are between 48.53 and 48.81) and all it has to do now is tackle the hurdle created by the 34-day at 49.07 then we are off to test the 50.34/51 range and c/p resistance area, a close above which is quite bullish. I would still argue that the recent daily lows at 47.16 and 47.01 are the support levels to watch as only a close below them will likely trigger significant selling.

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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.