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The key is RBOB at 262.69 and the s/t MA supports

Published Tuesday, September 2nd, 2014

The contracts are trying to push higher, and may yet do so. However for targets higher to be valid RBOB must move and close (m/c) over the 34 day MA around 262.69. This is the most important resistance on the board. It was RBOB’s target going into the weekend and it was hit yesterday. (Heat was similar when it hit the 34 day at 287.31 four days ago.) This completed a price cycle on this market leading contract and may well cause a pause for breath. With this target hit and not closed over it may well be wise to adopt a more neutral approach to the market until 262.69 is moved and closed over, thereby validating the targets higher generally. These would be to 96.46 WTI; 104.69 Brent; and 870.75 Gasoil. The short term MAs are the key support and need to hold to maintain upside potential. WTI would have target higher to 96.46 if RBOB can m/c over 262.69. It must in the meantime hold over the s/t MAs starting around 95.20 (5 day) then 94.61 (8 day) followed by 94.37 (13). There is no down side potential until it m/cs below the 13 around 94.37, and the upside momentum is maintained by staying over the 5. It’s not much more complex than that. Watch the s/t MAs for guidance. Brent would have an objective higher to 104.69 but also needs RBOB over 262.69. It is close to the s/t MAs and these need to be watched.

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Posted by Robin Bieber