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RBOB and WTI 34-day M/As are crucial today

Published Thursday, October 29th, 2015

Introduction. After targets on every contract had been hit on Tuesday the energy complex staged a very convincing recovery. All contracts gained significant value and in most cases the daily short-term M/As together with the 34-day M/As were settled above. The emphasis is on most cases. Not every contract managed to rally and close above these resistance. It is namely WTI that tested the 13 and 34-day M/A resistances but failed to settle above them. The technical picture looks encouraging as yesterday’s rally, led by RBOB and WTI, was impressive. However, we need to see follow-through buying today in order to be convinced that bulls are firmly in control.

WTI After hitting its 42.78 downside target it rallied and closed above the 5 and 8-day M/As. These are currently at 45.02 and 44.65. A close below the lower them will indicate that the strength we saw yesterday was just a one-off and re-visiting the 42.78 level should take place. On the upside the crucial resistance area is 45.79 and 46.39. This is where the 13 and 34-day M/As are. A close above them is bullish and such a move would green-light targets above the market. The first and not so strong one is the 47.91/97 range resistance area with the potential to go up to the 100-day contract M/A at around 49.77.b

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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.