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Pressure on support unless the 5-day MAs are firmly settled above

Published Tuesday, November 17th, 2015

Introduction. The downtrend continued for the better part of the day but a semi-decent short-covering rally helped the contracts recover towards the close and most of them settled in positive territory. WTI and Brent fell to lows not seen for about three months whilst Heating Oil, RBOB and Gasoil dived as low as the levels of the first half of 2009 before recovering. After last Friday’s dreadful events some inevitable and nervous position adjusting took place yesterday causing volatility. This erratic price movement, however, has not changed the underlying technical picture. It is still more bearish and therefore supports should come under renewed pressure today. This view will only start to change if or when the lowest of the daily short-term M/As, the 5-days, are settled above.

 

WTI The 5-day M/A resistance is currently at 41.77. No short positions should be held if closed above. On such a move the contract will be expected to jump up to the 8-day at around 42.65.  A failure to do so would mean the test of the 40.22/06 range support, a close below which will send the price down to 39.22, the contract low on August 24.

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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.