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Test of supports on ICE. NYMEX disappointed bulls.

Published Friday, October 16th, 2015

Those who started yesterday’s trading with a short position in the ICE contract are still probably holding them. NYMEX bulls, on the other hand, were forced to stop themselves out latest by the close. Despite the weak performance this contract has not turned bearish but might put crucial support levels under pressure today.

 

November ICE: In a way it was a narrow escape for bears as the 40.45/40.50 area was not conclusively closed above. Shorts are still keeping their positions and they are looking for renewed weakness today and the eventual test of the 39.46 support level. This is the continuation low on September 22. The odds of falling down there will increase significantly on a sustained intra-day break below the 40.25 level. This is where the contract bottomed out on Wednesday and Thursday. As far as protecting short positions is concerned there is a slight change in plan. Now only half of any existing short positions ought to be covered on a close above the 40.45/50 area. Given the moving nature of the M/As the 8-day is falling rather heavily and is presently at 41.11. This is the resistance that should be used to go completely flat in case of a rally and going long is only advised if the 13-day at around 41.28 is settled above. As things stand now supports are more likely to be tested than resistances.

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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.