Technical & Fundamental Oil Reports Specialists

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Watch RBOB, recovery action – it holds all the clues

Published Wednesday, August 20th, 2014

The trend has been down and relentless. Targets lower have been hit on the way south as the market behaved in very text-book down trend fashion. However, it’s now time to be careful and the two reasons for this are firstly every contract, bar WTI, has pretty much hit and held target supports. Secondly, and much more importantly, RBOB has not only held the most important support on the board at 266.07, but has rallied to close over its 5 day MA and is now just over its 8 day around 270.86. RBOB is a contract that has an extraordinary record of moving first and giving early warning signals. If yesterday’s action proves to be another such signal then it’s time to go flat and wait for developments. As such the action around the 8 day MA, around 270.86, is going to be very important – a failure would put pressure on the contracts, conversely a move and close (m/c) over would likely be a contagious signal for recovery.

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Posted by Robin Bieber