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Monthly technicals are more on the bearish side

Published Thursday, October 1st, 2015

Introduction: the changes from yesterday were negligible with WTI and Gasoil losing some value and the other three contract closing slightly higher on the day. The contracts are still bound by their respective ranges. The only difference from yesterday morning is that now every contract is slightly above their daily short-term M/As which might indicate stronger numbers. However, going long is only advised if the top end of the ranges are settled above. These resistances are re-iterated below. Since the complex has been moving sideways for quite some time and we are entering a new month we also sum up how monthly technicals fared in September and what they indicate for October.

WTI: a close above the daily high on September 17 at 48.07 is bullish and should push this contract up to 50.04, another range resistance and the daily high on the November contract on August 31. A very long-term trend line connecting the low of 10.35 in December 1998 with the low of 16.70 three years later is currently 45.85. It was settled below last month. The monthly M/As are well above the price action therefore monthly technicals are more on the negative side.

Brent: the top end of the immediate range is the 50.25/34 range and the 50.51 correction point resistance levels. Go long on a close above them. The same very long-term trend line is currently at 49.98 and whilst it is acting as a resistance monthly technicals are negative on this contract, too.

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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.