Technical & Fundamental Oil Reports Specialists

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No change – bearish

Published Wednesday, January 13th, 2016

Introduction.  We had a nice demonstration of the technical state of the energy complex yesterday as all the contracts rallied in the early part of the day only for this rally to be sold into and further losses were inflicted by the end of the day. There will be the inevitable upside corrections and the first one for a long time might come today if the weekly EIA stats on US oil inventories turn out more bullish than anticipated. Even in case of some price strength one thing has to be kept in mind. That is that the current trend is down and it will take much more than just a one-day jump for sentiment to turn. For that to happen we shall have to see closes over the highest of the daily short-term M/As, the 13-day that are well above the current price levels. In the meantime we have targets lower on all of the main contract and rallies, if they occur, are still seen as selling opportunities. On WTI current shorts who are looking to cover if or when the 26.80 range support is tested will only protect their positions if the 2008 low at 32.40 is settled back over. Even in that case they will feel tempted to sell short again on the test of the 8-day M/A resistance which is currently printing 33.22.

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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.