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Watch the 100-day M/A on ICE. NYMEX is still negative.

Published Wednesday, September 30th, 2015

The new front-month contract, the November one on ICE failed to make a fresh all-time low yesterday but it is still very much on the negative side and a weak close today will trigger a sell short signal. NYMEX, which was bearish yesterday morning, did drift lower and not only hit supports making it possible for shorts to take profit but also closed below it so bears probably sold short again on the close.

 

November ICE: The formula on this contract seems relatively straightforward. The 100-day continuation M/A is at 41.74. The lowest print on the November contract is 41.60. An intra-day break below the latter is a sell. A close below the former is also a sell. Should these moves take place it seems logical that the contract will head towards the gap at 40.45 left on the continuation chart at yesterday’s expiry. No short positions should be held in case the 5 and 8-day M/A resistances are settled back above. They are currently at 42.01 and 42.09. In that case the test of the 13-day M/A at 42.45 is expected. Such a rally is a sell provided that the 13-day is not closed above. If it is then it will be advised to go long. At the moment the contract is more on the bearish side given the negative status of the daily slow stochastics and the fact that the short-term M/As are acting as resistances. This view will be supported by a close below 41.74 or a break below 41.60.

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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.