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Patience is needed on both contracts.

Published Tuesday, November 24th, 2015

ICE tested its important range support before strengthening. No sell signal was given. The short-term daily M/A resistances were untroubled too, therefore, it is still logical to stay put and wait for developments. NYMEX, on the other hand went on a roller coaster ride as follow-through selling from Friday pushed the contract lower in the morning only to experience a complete change of heart as fresh buying sent the price over the resistance where shorts were recommended to cut losses and go flat. As the NYMEX contract expires tomorrow and ICE on Friday we are switching from December to January.

January ICE: To put it simply those who are looking to sell short are keeping a close eye on the 36.46 range support. It is last week’s low on the December contract and this is the exact level where the contract turned higher yesterday. The January equivalent of this level is 37.01/36.96. A close below this support is a sell. The January contract has never been below this area so should it be settled below a lower number will be expected, especially if the 36.46 continuation and December low is also broken and closed below. Such a move will green-light the weekly low of 35.10 in July last year as the next target on the downside. On the upside a break and close above the 5 and 8-day M/As at 37.57/67 will push the price up to the 13-day (37.88) and to the 37.90 range resistance and on a close above the latter the current downtrend will “officially” reverse. Such a close would be a buy and the daily high on the January contract on November 17 at 39.07 will become the closest upside target.

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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.