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Still flat on both contracts

Published Wednesday, December 9th, 2015

After the contracts tested strong supports on Monday and provided shorts with an opportunity to go flat we saw yet another attempt to break below these support areas yesterday. It ended up in failure therefore it is still best to stay put. There is no change in the advice from yesterday. Currently do not contemplate going long. Selling short is desirable if supports are settled below or if resistances are tested but not closed over.

 

January ICE: It is the continuation low on November 12 & 23 at 36.46. This is the level that must be closed below to get another sell-short signal. In that case the weekly low in July 2014 will be targeted. It is 35.10 and is an extremely strong support level that is quite likely to hold if or when tested. Should it not it will have very bearish consequences. The 8-day M/A is coming lower by the day and it is at 37.99 at the time of writing. An eventual break above the 5-day M/A (37.48) would probably push the price up there. If tested but not closed above it is advised to sell short for a dump to the 37.01/36.95 range support area. The daily slow stochastics is negative and all the daily short-term M/As are acting as resistance. The trend is still down so sell short on a close below 36.46 or on a rally to the 8-day M/A. Only a close over the latter will make bears uncertain.

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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.