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Downtrend is reinstated on ICE. NYMEX is stuck.

Published Wednesday, October 21st, 2015

The price action yesterday confirmed that Monday’s rally on ICE was not a sign of trend reversal, it was simply a healthy and possibly inevitable upside correction in an otherwise down-trending market. Supports were closed below and downside objectives re-validated. On the other hand, the price action on the NYMEX contract cannot be described with the same excitement. Resistances were tested but not closed over whilst crucial supports were not in sight. Maybe today.

November ICE: We saw a rally up to the 13-day M/A resistance on Tuesday where the contract faltered and closed below both the 13 and 8-day M/As. Further selling pushed the contract below the 5-day M/A support yesterday (currently at 40.42) and also below the 40.50 range support. Bears are probably fully short again. What we have learnt this week is that shorts should use the 13-day M/A resistance to protect their positions. It is advised to cover part of it on a sustained intra-day break above it and go flat and long if closed over. It is at 41.07 and a rally and settlement over this resistance is likely push the price up to the 100-day continuation M/A at 41.59 and to the 34-day contract M/A at 42.04.

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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.