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ICE is trying to turn bearish, NYMEX bullish

Published Monday, October 12th, 2015

We identified levels on both contracts on Friday below/above which sell/buy signals would be given. These levels were not settled below/above on Friday. This morning, however, the ICE contract is breaking below support whilst NYMEX is doing its best to penetrate resistance. Although closing prices are the most important ones as far as technicals are concerned, it might be an idea to pre-empt a little bit and start gently selling on ICE and going long on NYMEX provided its resistance is broken over on a sustained basis.

 

November ICE: The support below which it has been recommended to sell short was the 100-day continuation M/A at around 41.68 that is incidentally quite close to the daily short-term M/As between 41.63 and 41.85. These were tested but closed above on Friday. We are experiencing a U-turn this morning as the contract has opened with a downside gap and is steadily drifting lower. A close below the aformentioned100-day M/A is a sell for a dump to the continuation gap at 40.50. The print at the time of writing is 41.30 so it might be in idea to sell a small part of any positions just to test the waters and go fully short on a close below the 100-day M/A. Of course if this morning’s weakness turns out to be misleading and the contract rallies and settles back above 41.68 then no short positions should be held by the close. Otherwise bears ought to take profit on the gap fill and sell short again if 40.50 is broken and closed below. On such a move the continuation low on September 22 at 39.46 will be validated as the nearest objective on the downside.

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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.