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ICE has turned bearish – NYMEX still is

Published Friday, December 4th, 2015

The ICE contract closed below all significant supports forcing longs not only to cut losses but also sell short. These short positions are a little bit fragile at the moment but are completely justified from the technical perspective. NYMEX hit its first set of support allowing bears to cash in on part of their short positions. The contract then strengthened but no resistances were settled above therefore bears are still running reduced short positions.

January ICE: It was advised to liquidate long positions and even sell short if the lowest of the daily short-term M/As, the 13-day was closed below. This duly happened so, as things stand now, the contract has turned bearish. Whether it will last remains to be seen but at the moment there are targets below the market. They are the recent daily lows on the January contract at 37.01 and 36.95. Should the contract fall shorts are recommended to cover just above this area. Protecting current positions is logical on a break and close above the highest of the daily short-term M/As, the 5-day that is currently printing 38.54. If there is no follow-through selling today and the contract closes above the 5-day M/A resistance then the market will be considered range-bound with the lower end the aforementioned range support area and the upper this week’s high 39.63.

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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.