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ICE support has been tested. NYMEX is undecided for now.

Published Tuesday, November 10th, 2015

The first half of yesterday’s headline proved to be correct (Test of support on ICE) but the latter part has been misplaced (NYMEX gave a buy signal). It might not have been misplaced at the time of writing but the advice turned out to be immature as the contract settled below supports and did not test resistances. So, running short positions on ICE is still reasonable whilst it is advised to be flat on NYMEX and wait for developments.


December ICE: Those who shorted the contract last Thursday when the 38.86 range support was closed below have been expecting the test of the continuation lows of 37.90/75 on August 24 & 25 to cover these positions. Whilst the message at the beginning of this report has been to keep running short positions the aforementioned support area has been tested. The low has been 38.01, close enough to take profit. Needless to say that on a close below 37.75 it is highly recommended to sell short again. Such a move will green-light 35.10, the weekly low in July 2014 as the next objective on the downside. It appears that a rally up to the 13-day M/A at around 39.03 is also a sell provided that this resistance is not closed above. If it is then the technical picture will change drastically and acquiring length will be recommended. Under the latter scenario it is not unreasonable to expect the contract to jump up to the 34-day contract M/A which is presently at 41.10. As for today, watch the price action around the 37.75 support; a close below this support is deemed very bearish.

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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.