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Bears are firmly in control but potential for upside retracement today

Published Friday, December 11th, 2015

The contracts maintained their downward paths yesterday as both lost values and both finally settled below their respective support levels. We got a valid and genuine sell-short signal and there is nothing wrong with being short at the moment. Objectives below the current price levels have been greenlighted. They are expected to be hit sooner or later. This test of the next sets of supports might actually not take place today but early next week as some kind of pre-weekend strength could push the prices a wee higher. However, as long as the 8-day M/As are acting as resistances bears have nothing to worry about.

January ICE: It is the 36.46 range support and continuation lows on November 12 & 23 that needed to be settled below to go short. This settlement did take place and the 35.10 range support and weekly low in July 2014 has been validated as the nearest downside target. Shorts are advised to cover in case the contract falls down there and re-sell if closed below. In fact, such a move would be considered extremely bearish as in that case the next downside target is the 28.35 monthly low back in March 2010. Current shorts are recommended to protect their positions on a break and close above the 8-day M/A which is currently at 37.32.

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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.