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Pause or bottoming out?

Published Wednesday, November 4th, 2015

Look at the daily changes then read the commentary below or take out yesterday’s report – there will not be much difference. Perhaps the most significant development of yesterday was that the longer supports hold in an underlying bearish technical environment the bigger the chances are that the bottom is near. On the other hand, a confirmation of such “bottoming” would come in the form of closing over assorted M/A resistances; something that has not happened yet on either of the contracts. Additionally, the daily slow stochastics are still negative therefore we would like to maintain the negative backdrop to the current technical picture – at least for the time being. In other words, closes below supports or rallies to resistances are still deemed to be sells.

 

December ICE: The support below which it is advised to sell short is 38.86, last week’s continuation low. Such a move will green-light 37.90/75 as the nearest downside target. They are the continuation lows from August. A rally to the 8-day M/A is also a sell for fall down to 38.86. This resistance is currently at 39.62. A break and close above it will push the price to the 13-day M/A at 40.10. It is recommended to go flat and even long on a break and close over the latter. Such a move would validate the 34-day contract M/A at 41.69 as the closest upside objective. As for today, watch 38.86.

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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.