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ICE might retrace but it is bearish. NYMEX is undecided.

Published Friday, November 13th, 2015

ICE has lost value for the fourth consecutive trading day therefore the underlying sentiment and the technical indicators are still bearish. NYMEX had a serious go at its support level which held and the daily short-term M/As have not been settled above. The verdict, therefore, on this contract is range-bound.

December ICE: As said above this contract is bearish but this does not mean that we shall not see some kind of upside correction. It has been losing value this week and today is Friday, a perfect excuse to cover some of the existing short positions. Such strength, however, would not mean a change in trend as long as the 37.75/90 range resistance together with the 8-day M/A currently at 37.92 are above the price action. Only on a close above this area shorts are recommended to cover their positions. The strength on the current downtrend is nicely demonstrated on the daily chart: neither the 8 nor the 13-day M/As (the latter is at 38.55) have been closed above since October 12. Logic, therefore, says that only go flat if the former is closed above and long if the latter is broken and settled over.

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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.