Technical & Fundamental Oil Reports Specialists

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Down trend on hold, market trying to recover – Watch the 5s

Published Thursday, July 17th, 2014

The down trend is on hold. The contracts have held support and rallied some. For the most part the market will develop around a battle at the 5 and 8 day MAs, and it’s the action at these MAs that will determine the next leg. Were RBOB in better shape – it lost 161 points yesterday, failed and closed below the 5 day and has a negative stochastic – I would have said that the odds would be 100% on higher. However RBOB has a history of giving early warning signals and being a contract to watch carefully – so I’m a bit concerned by its lack of performance yesterday. Suffice to say it’s just ok whilst it holds over 286.59, but is not exactly giving the thumbs up to a recovery whilst below 288.87 and the 5 day. As for the rest they need to safely negotiate the 5 day MAs in order to head higher to the 8s, which is what WTI is doing at the moment. They also all have positive stochastics, which is promising. WTI was the only contract to move and close (m/c) over the 5 day MA and is now heading s/s fashion for the 8. The 5 must hold and it is around 100.84, co-located with the 100, and the 8 is around 101.63. This is likely to come under pressure. A move over the 8 would then likely take us up to the first c/p at 102.25 with real potential to reach for the 13 around 102.63.

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Posted by Robin Bieber