Technical & Fundamental Oil Reports Specialists

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Downside developing – Brief recovery first; Watch RBOB for the next leg

Published Tuesday, April 29th, 2014

The contracts had a bad day at the office yesterday. They had been in a comfortable geo-political range, threatening to go higher on every bump in the Ukrainian road, but this idyll was shattered as the contracts began to falter, look heavy and were clearly laden with skittish length. The floor caved in when May RBOB slid below 308.26 and the rest followed. WTI did not join in so much – but nor had it gone up as much as the rest in the past few days (look at a WTI/Brent chart). All contracts are below the short term MAs and the stochastics are negative. We are potentially in the first stage of a down-trend. The key is what happens at support and in particular on June RBOB at 297.31 – this is the trigger for the next leg lower. Equally a (fragile) recovery would be flagged by a move over 299.20. Watch these two levels carefully. WTI dipped to key support at 100.36/26 and held (low of 100.33). There are no targets lower whilst this level holds. A move and close (m/c) below 100.26 would be a sell for a leg down to 99.35.

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Posted by Robin Bieber