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Watch the 13s – key support. 5 and 8s are resistance. Lower likely later

Published Wednesday, February 26th, 2014

The contracts are experiencing a pretty perfect slingshot (s/s) move lower in what is still an up-trend. The price action prior to this was ebbing and flowing between the 5 and 8s and now the 8s have failed and the action is down to the 13s (yesterday) and hold your breath. The weakness has slightly altered the dynamic – i.e. failing at the 8s – and made it more a question of the 8 and 13s, where the 13s are key support and represent the culmination of the s/s move from below the 8s. In short – the 13s are generally support and the 8s are resistance today. The up-trend would only be deemed broken on closes below the 13s, and is not reinstated until there are closes back over the 5 and 8s. The stochastics are negative, which suggest rallies will be hard work and that the up-trend is in serious danger of being turned. It is advised to remain flat until the market makes its decision. WTI has failed at the 8 day around 102.04 and this made a s/s move lower to the 13 very probably. This occurred yesterday – the low was at 101.12, the continuation 13 day was at 101.10, (the contract 13 slightly lower at 100.78). There are no targets lower until this contract closes below the 13, around 101.12. The objective would then become 99.79 – the 200 day. Key resistance is at 101.93/102.04 (b/b and 8 day) then 102.25 (5 day). It would need a close over 102.25 to suggest higher numbers, and in the meantime the odds are on a failure on any rally close to the 5 and 8s. Brent slid below the 5 and 8s and headed for the 13, around 109.36. A close below here today would be a body blow and green light a leg lower to 108.77 (100 day), with good potential to move lower. The key to the action today is the 13 day – watch it carefully. Resistance, after the 13 day, is at 109.95 (5 and 8s). This is critical – a close back over here would re-instate the up-trend. This is strong resistance. Heat completed a perfect s/s move lower from the failure at the 5 and 8s to a move lower to the c/p and 13 day around 307.24/00 yesterday. It has now rallied back up from here and is testing the 5 and 8s around 311.29 and 311.53. Watch these levels carefully – a move and close back over the 5 and 8s would encourage the rest to hold. Meanwhile the odds are on a failure at the 5 and 8s. RBOB is also very important. Watch at the 13 day around 279.49. This may be deemed the most important support on the board today. It must hold or both it and the rest of the contracts will come under pressure. A move and close back below here would be bearish and green light a move lower to 278.43. Resistance is firstly at the b/b at 281.65 and then the 5 and 8s around 282.10. Watch these resistances on a rally. Use 279.49 as a guide – it is important. Gasoil is below all the s/t MAs and is vulnerable. However it will move around with the rest. The stochastics are negative. The 5 and 8s are resistance, but for the most part the 13s are trying to hold. The odds are on some profit taking this morning. If the 13s don’t hold later then the uptrend will be over and lower numbers are likely.

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Posted by Robin Bieber