Brent - Preparation is Key

I dont think it comes to many people's surprise that Brent looks bullish, as well yes it does, but I think it might be worth talking objectively about this commodity and pointing out target levels.   Given its recent up move has been on a risk premium being priced in to the contract (Syria - Middle East contagion, Egypt - Suez canal closure), it can also be wiped out just quick as it was priced in.





Consensus from fundamental analysts place the relative fair value around $100-$105 mark claiming this move is not sustainable given the increased production levels from Saudi and US/Canada.  Not to say that is where the price should be necessarily, but as people should be conscious of not being caught long incase of a swift reversal.

We've seen a really nice accelerated up trend line adjustments twice already, which will be a good way to safeguard long positions.  For the downside support levels, first reached will be on the steepest trend line, a break of that and 112.24 will be in focus, the low on 1st Sept; following that 109.00 and 106.00 respectively.

Granted up moves from here could be violent and quick, disregarding any technical levels / projections, but on a break above the high on the 27th Aug (117.20) the key resistances would be previous highs of 118.00 and 126.10.  The rally from 24th June - 27th August, we have a Fibonacci projection of 127.90




Charts sourced from ig.com