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Target hit on ICE. Brief NYMEX rally then lower again.

Published Tuesday, September 22nd, 2015

The weak performances on Friday were extended yesterday as both contracts softened further. ICE did not fall down to its next support area where shorts were recommended to cover but the good news is that this level has been tested this morning. It made it possible for bears to put some money in the bank and wait for developments. NYMEX fell down to its initial support which held. Profit, therefore, should have been taken on part of any short positions with the ultimate downside objective still very much valid.

 

October ICE: It is the 39.50/40 range support area where shorts were recommended to cover their positions. These are the daily lows on the October contract on August 24 & 25. The market did not quite get down there yesterday but the low this morning has been 39.46. It is advised to be flat now and sell closes below supports or rallies to resistances. The support is question is the aforementioned 39.50/40 area. If it is above tonight’s close then the next targets on the downside are the weekly lows at 38.55 and then at 37.75 in June 2014 and August 2015 respectively. Since the trend is down an eventual rally up to the 40.85/98 range resistance area is a sell in which case profit should be taken on the re-test of the 39.50/40 support. These short positions should be protected on a break and close above the 13-day M/A at around 41.31. As a matter of fact on such a move going long will be reasonable, a move which is currently quite unlikely.

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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.