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ICE is still firmly bearish. NYMEX is likely to test its crucial support.

Published Thursday, November 12th, 2015

Both of the contracts lost values yesterday. For ICE bears this means that they are still running short positions and at the moment all they are advised to do is to bring the stop level lower. The downside objective has not changed. NYMEX closed below all of its daily short-term M/As but went very close to its crucial support area therefore running fresh short positions might be a little bit risky although if anything this contract is also more o the negative side.

 

December ICE: After closing below the 37.90/75 range support area on Tuesday the contract fell further therefore the downside objective is still very much valid. It is the low in the week ending 11 July 2014 at 35.10. There are a few weekly lows around this week that represent weakish supports (36.75/36.50/35.95) but it is really the 35.10 area where the contract is expected to be heading. It was recommended in yesterday’s report to protect short positions on a rally and close above the 8-day M/A resistance which is currently at 38.17. Given the renewed softness yesterday it now only makes sense to bring the protection level lower and use the former support, now resistance of 37.75/90, to cut losses in case of a rally. To cut a long story short on a sustained break above it get rid of part of your short positions and go flat if closed above. Otherwise keep your positions and expect the test of the 35.10 support in coming days.

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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.