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Patience on ICE. NYMEX is bearish.

Published Tuesday, September 29th, 2015

We have got the NYMEX expiry out of the way and in the process the new front-month, the November contract, provided us with a sell signal. The October contract on ICE expires today and the November one failed to settle below crucial support area therefore it is recommended to be flat on this contract for the time being.

 

November ICE: the support that needs to be closed below is 41.30/29. These are daily lows on the continuation basis reached on May 5 & 26. On such a move it is recommended to sell short and in that case the test of the 50% continuation correction point of the August-September rally at 39.97 will be the nearest downside objective. After an eventual test of the c/p support re-instating short positions is reasonable on a close below 39.45, which is the continuation low last Tuesday. Such a move will green-light the 37.75 range support, and yet another continuation low (August 25) as the next objective below the market. All the potential support levels and downside targets come from the continuation chart. This is because the November contract is at its lowest level ever. In other words, it is more on the bearish side and a move and close below 41.30/29 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.