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Upside correction is in progress

Published Wednesday, September 23rd, 2015

Both contracts closed higher yesterday, ICE more so than NYMEX. Further advances are being made in the former as it is testing crucial resistance level. A close over it will turn the technical picture neutral. On NYMEX part of short positions should still be open and this will only have to be protected if the range and M/A resistances are settled over.

 

October ICE: The contract tested its 39.50/40 rage support and downside target yesterday morning. As shorts took profit the price strengthened and by the end of the day semi-decent gains was registered. Follow-through buying is pushing the contract even higher this morning. The advice from yesterday on selling rallies up to the 40.85/98 range resistance area is now altered a little bit. This resistance is being put under pressure at the time of writing and it would make sense to sell short again if it is not closed above. In that case profit should be taken just above 39.50/40 whilst losses cut if the 13-day M/A at 40.99 is closed over. Should the latter be settled above tonight then it is advised to go long as in that case the downtrend will be deemed over and the test of the 100-day continuation M/A at 41.84 will be anticipated. Watch the 40.85/99 level today. The price action around it will determine the next leg.

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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.