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Another failure at resistances

Published Tuesday, February 2nd, 2016

Introduction. Yesterday we experienced yet another failure at resistances. The sell-off that followed pushed the complex down to assorted M/A and range supports which were not closed conclusively below. From the technical perspective it would be pre-mature to write-off the uptrend that developed last week, however we now have to see stronger numbers otherwise the fading optimism will disappear completely. At the moment it is best to stay put and wait for the technical picture to become clearer. A failure to start going higher today will result in supports being penetrated and the daily slow stochastics turning south. WTI half-heartedly tested its 34-day contract M/A which is at 34.56 today. Only a close above this and the 61.8% retracement level of the January downtrend at 34.96 will be considered very bullish. It is, at the moment, nothing more than wishful thinking since the contract was sold off yesterday. During this weakness it broke and closed below the 5 and 8-day M/As (32.34 and 31.98) and also fell below the 2009 low at 32.40. It did, however, hold the 13-day which is currently at 31.21. A close below that will mean the end of the recent uptrend and as such it seems to be a sell.

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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.