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Look for a dip to the 5 day MA – Up-trend intact

Published Tuesday, June 17th, 2014

The contracts remain in an up-trend but are pausing for breath whilst the 5 day MAs plays catch-up. This is textbook action when a market races in one direction or another and leaves the fast 5 day MAs behind. The outright price action then slows down somewhat, usually as result of absence of any more good or bad news, and the 5 day narrows the gap between it and the action. This is exactly what has occurred over the last two trading days and the 5 day is now nearer and is key initial support below the market. The 5s may well be tested today, and are a buy. They must hold or the contracts dip further, slingshot fashion, to the 8s. The stochastics are positive, but are high and wobbling a bit. The trend is up, but pausing for breath as the 5s approach. It is not advised to be short. WTI has closed below 107.17, and whilst below here has no target higher. A move and close (m/c) over 107.17 would green light the next leg up to 108.99. Initial support is at the 5 day around 106.26, with the 8 day somewhat lower around 105.34. Watch the action around the 5 day very carefully. Brent needs a m/c over 113.02 to green light the next leg up to 115.29.

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Posted by Robin Bieber