Technical & Fundamental Oil Reports Specialists

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Serious supports have been hit this morning. Be flat.

Published Monday, December 14th, 2015

We suggested on Friday that some kind of upside retracement could take place despite both contracts being bearish and shorts would have nothing to worry about unless the 8-day M/A resistances were settled over. These shorts have probably never been happier that we were wrong as both contracts drifted lower on Friday. NYMEX tested its highest support on Friday but to make life even more satisfying further selling has pushed the prices to last ditch supports on both ICE and NYMEX providing bears with an opportunity to take profit on the whole positions. Closes below these last ditches of supports would be extremely bearish as these levels are very-very strong indeed.

January ICE: The support in question is the weekly low in July 2014 and is at 35.10. It was not seriously challenged on Friday but this morning’s low has been 35.15 and I would call it close enough for shorts to go completely flat and wait for developments. Needless to say that a close below 35.10 is very bearish and as such would be a sell.  It is rather hard to find strong supports close to this level. We have some weakish monthly lows in the form of the 33.54 level (monthly low in February 2009) and 32.50 (monthly low in August 2006) but the first strong one is at 30.75. It is the monthly low in May 2006.

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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.