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Supports held on both contracts – be flat

Published Tuesday, November 3rd, 2015

December ICE: The current price is 38.87. The 5-day M/A is 39.52 at the moment, the 8-day is at 39.76 and the 13-day is at 40.26. The daily slow stochastics is firmly pointing south. The December contract made a fresh all-time low yesterday. All of the above indicates lower numbers. It might well be the case but it also has to be noted that last week’s continuation low of 38.86 was only briefly broken but not closed below. If it is above tonight’s settlement level then it is advised to sell short for a dump down to the August lows of 37.90 and 37.75. These are the lowest continuation prints for more than a year therefore a close below them is also a sell. Such a move will green-light 35.10, the weekly low in July 2014 as the next objective on the downside. Equally, a rally to the 8-day M/A at 39.76 is a sell. These shorts ought to cover on a renewed test of 38.86 or cut losses on a break and close above the 13-day M/A at around 40.26. At the moment the odds are on the eventual close below the 38.86 support.

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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.