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ICE is still more negative. Crucial support is holding on NYMEX.

Published Tuesday, October 6th, 2015

ICE shorts won yesterday’s battle but the war is far from over. Resistances were tested but not closed above therefore they are probably still keeping their positions. On NYMEX the virtually unchanged settlement shows that there is no change on the technical front and it is still recommended to be squared and look for shorting the contract on a close below crucial support or on a rally up to resistance.

 

November ICE: The resistance area that needed to be settled above in order for shorts to cut losses was the 8 and 100-day M/As. Both were tested but not closed above yesterday. The former is now 41.59 and the latter is at 41.68. Additionally, the 13-day M/A is coming lower by the day and its current value is 41.87. This is now the resistance that needs careful watching. Bears are recommended to start covering if broken over on a sustained basis and go flat and even long if closed above. A settlement over the 13-day M/A could easily mean that the downtrend which started at the beginning of September is over. In that case the test of the 50% correction point of this downtrend at 42.60 and the 34-day contract M/A at 42.79 will be expected. In the absence of any price strength today shorts should try and run their positions down to the downside objective. It is the 40.50/45 gap/range support area. The trend is still down from the technical point of view and will remain so until the 8/100/13-day M/As are above the price action.

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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.