After a small correction in the end of last week, yesterday the price of Brent crude oil fell to its 11-year lows again amid investors’ worries over supply excess on the market.
The Organisation of Petroleum Exporting Countries (OPEC) noted that current excess in supply of about 2 million barrels a day is likely to remain in the first half of 2016. Furthermore, after sanctions are lifted from Iran at the beginning of the next year, the country is going to intensify its exports that would increase pressure on the price.
Support and resistance
Bollinger Bands on the daily chart is turning horizontally while the price range is narrowing. MACD is growing and giving a weak buy signal. Stochastic turned down as it failed to reach the overbought zone.
The indicators recommend waiting for clearer trading signals.
Support levels: 36.20 (14 December low), 35.85 (22 December low), 35.00.
Resistance levels: 37.00 (local high), 38.00 (24 December highs), 38.77, 39.44, 40.00, 40.46, 41.00 (9 December high), 42.08, 43.00.
Open short positions from current prices with the target at 35.55 and stop-loss at 36.85. Validity – 2-4 days.
Long positions can be opened after the breakout of the level of 38.32 with the target at 41.00 and stop-loss at 38.00. Validity – 2-4 days.Publication source