Technical & Fundamental Oil Reports Specialists

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The energy complex is currently bullish but be on alert

Published Friday, January 29th, 2016

Introduction.  It was said in yesterday’s report that two out of the five contracts had closed above resistance levels on Wednesday. These contracts, Brent and Heating Oil, have hit their closest target but these resistances proved too hard to overcome. The rest closed above resistances in yesterday’s very volatile price action. There is, therefore, nothing wrong with being long on them. The technical picture is bullish. Regardless of the fundamental backdrop it must be bullish after three consecutive days of impressive rally but this bullishness is fragile. There are clearly defined supports below the current price action below which it is highly recommended to cut back on long positions.  This support on WTI is the 2009 low at 32.40. If it is broken and closed below longs should take whatever loss there is to take and wait for developments. In case the contract follows through and runs higher it is the 61.8% correction point of the latest leg down at 34.96 where profit should be taken. These positions then ought to be re-established on a close above the 34-day M/A at around 35.03

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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.