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Test of support on ICE. NYMEX is turning bearish.

Published Thursday, October 22nd, 2015

The ICE contract continues to live up to its bearish expectations as it traded lower yesterday and is weakening further this morning. Supports are expected to come under pressure. NYMEX had a serious go at crucial support levels, settled lower, but the jury is very much out whether yesterday’s closing level was conclusive enough for bears to go fully short.

November ICE: After failing at the short-term M/A resistances on Monday and Tuesday it was said in yesterday’s report that the downtrend resumed and supports were expected to be in sight shortly. We singled out 39.46 as the support level where shorts should cover their positions. It is the continuation low on September 22. This recommendation is still valid. Of course, if this support is settled below shorts will be eager to re-instate their positions and in that case they will be looking for the test of the 37.75 area. It is the daily continuation low on August 25. All the daily M/As, short, medium and long-term, are above the current price action and the daily slow stochastics is negative. All these suggest further weakness but one has to be prepared to react if or when the unexpected happens.

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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.