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ICE has turned bullish. NYMEX is undecided.

Published Wednesday, October 7th, 2015

ICE shorts might have won their battle on Monday but as it turns out they were left seriously bruised and defeated yesterday. The contract rallied hard and closed over resistances that separated the bear market from the bull one. NYMEX, on the other hand, was rather uneventful. It is still best to stay put on this contract.

 

November ICE: The contract has failed to fill the continuation gap at 40.50 as it bottomed out at 40.85 on Monday. It rallied and closed above all of its daily short-term M/As and also the 100-day continuation M/A. They are between 41.69 and 41.93 this morning. The contract will turn negative again if the lowest of them is settled below. Shorts probably started to cover when this resistance area was broken above over the course of yesterday and were flat by the close. Bulls started to go long, however they are now advised to be flat after having put some money in the bank. The reason to say this is that the 34-day contract M/A which is currently at 42.81 was tested with a high at 42.74, so far. A close above the 42.81 resistance is a buy again. In that case the daily high on the November contract on September 2 at 44.38 will become the nearest upside target. Go long on a close above the 34-dasy M/A or short on a close below the 100-day continuation M/A at 41.69. Under the latter scenario yesterday’s strength will be viewed as a bull trap.

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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.