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Test of resistance on both contracts.

Published Thursday, September 10th, 2015

The headline might be a little bit misleading. It does not try imply that contracts are bullish, it merely points out that supports held yesterday and therefore the odds are now on the test of resistances. It was advised on both contracts to buy dips. These dips duly happened a couple of days ago and profits now should be taken when resistances are in sight. Of course, if the market weakens for whatever reason then longs should liquidate and even go short if crucial supports are settled below.

 

October ICE: The 5 and the 8-day M/As at around 41.30/37 were both closed below but the 13-day M/A which is presently at 40.98 were not even tested. Tuesday’s dip was probably tempted for bulls to buy into and they will likely to hold their positions unless the 13-day is broken and closed below. On such a close we are likely to fall down to the 39.40/50 range support area therefore it would be a sell. It is, at the moment, the more unlikely scenario. Instead we should probably see further strength and current longs are advised to take profit on a pop up to the 42.00 and it is highly recommended to re-instate these long positions if the 100-day continuation M/A at around 42.12. Such a move is considered bullish and will green-light the next upside target, the 61.8% correction point of the July-August downtrend at 43.11 and the 100-day contract M/A at 43.55. Watch the 13-day M/A; whilst the contract is above it it is more on the bullish side.

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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.