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One more push higher and the market will turn bullish

Published Friday, August 22nd, 2014

Once again it was RBOB that was leading the market and once again the direction was up. Every contract tested supports over the course of the London morning but failed to break below them which triggered a relatively decent short-covering rally. Nevertheless, it is only the above-mentioned contract that has turned unreservedly positive whilst the rest still have some hard work to do. RBOB settled above all of its short-term daily M/As therefore it has objectives higher. The nearest one is the 34-day contract M/A at around 279.66. On a close above it, the 275.75/84 range resistance is very likely to be tested early next week. On the other hand, should the highest of the daily M/As, the 13-day at around 272.58 be closed back below all the hard work of the last 2-3 days will be in vain and will be viewed as a bull trap. As for the rest daily gains were relatively muted at least compared to RBOB and perhaps more importantly crucial resistances were not closed above. These resistances are the 8-day M/As. If WTI managed to settle above it (it is currently at 94.25) this contract would run up to the 13-day at around 95.19 and possibly up to the 200-day contract M/A at around 96.38.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.