Technical & Fundamental Oil Reports Specialists

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Both contracts are bearish

Published Monday, October 26th, 2015

The contracts lost some value on Friday finishing the week on a sour note but neither of them settled below their respective support areas. That means the there was no opportunity to short the ICE contract and NYMEX shorts went home for the weekend still short. The technical picture has changed over the weekend.

November ICE: The 39.46 range support area was tested on Friday with a low at 39.45. It provided shorts with an opportunity to cover their positions with some profit. This level, however, was not settled below therefore they were unable to re-instate their positions. This morning the market is significantly weaker. The November contract is trading at its lowest level ever and the 39.46 support has been broken below. A close below this area is undoubtedly negative but those who believe that the 39.45/46 area will not be settled back over today might want to pre-empt and start selling short during the course of today. It is then advised to go fully short if the 39.46/45 level is settled below or be flat if closed back above. Under the former scenario fresh shorts should try and run their positions down to 37.90/75.

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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.