Technical & Fundamental Oil Reports Specialists

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Negative whilst below the 13-day MAs – Up-trend over whilst below s/t MAs

Published Friday, February 28th, 2014

The up-trend is over. The contracts, with the exception of WTI, are below all the short term (s/t) MAs – the 5, 8 and the 13s. WTI is still just above its 13 around 101.60. The barometer for an up-trend is being above all the s/t MAs and in particular the 13s. These failed yesterday on Heat and RBOB, and had failed the previous day on Brent and Gasoil. The most dangerous point in any trend is the beginning, i.e. is a down trend now beginning, or do we face a “bear trap”? The next 48 hours will give us the answer because that is when 90% of bear traps occur. The signal for a bear trap would be moves and closes over the 5 and 13 day MAs combos – they are mostly co-located today. In the meantime rallies to the 5 and 13s are sales. The stochastics are all high and negative, which will make any rally hard going, and make a bear trap unlikely. WTI is holding the 13 day MA around 101.60. A move confirmed by a close below here would be very bearish and green light a target lower to 99.87 (200 day). Resistance is at the 5 day around 102.27 then the 8 day and b/b around 102.42.

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Posted by Robin Bieber