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Overall downtrend and lower, but with the odd sellable rally

Published Tuesday, January 19th, 2016

Introduction. The trend remains down. However do not be surprised by short covering rallies. The daily stochastics are suggesting in the very short term that the market has done enough and we may well witness an attempt to recover, which would be a sell at the 8 day MAs. There are targets lower on WTI 26.65; Brent to 25.05; Heat to 81.15; and Gasoil to 245.50. These are valid whilst below the 8 day MAs around 30.57 WTI; 30.56 Brent; 106.75 Heat; and 286.75 Gasoil. The “5 day gap” has narrowed to almost nothing from north of $1.30 yesterday and the 5s may well be breached this morning. If this is the case look for a “slingshot” move higher to the 8s. The 8s are a sell. Although longer term targets lower would be put on hold by a move confirmed by a close (m/c) over the 8s the odds that the trend is turning are slim and would need a lot more upside – at least a m/c over the 13s some way higher – yet to indicate a change in direction. Beware of false rallies. WTI has an objective to 26.65, valid whilst below the 8 day MA, around 30.57. The potential targets after 26.65 are to 16.70 then 10.35. The bull/bear (b/b) pivot is support at 29.10 and a m/c below here would be immediately negative and point to the target being imminently hit. The 5 day MA is around 29.91 – use this as a pivot. Over here and look for a rally to the 8.

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Posted by Robin Bieber