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Watch the 8 and 13s; the 8s hold the clues

Published Monday, December 22nd, 2014

The contracts are trying to hold. There are no targets lower at the moment. On Friday, the contracts started below the 5 day MAs, rallied, tested the 8s, faltered some but did not dump, and generally closed over the 5 and below the 8s. The 8s are lower now and the contracts, less Heat (which alone is still below the 8), are consequently not only above the 5s but over the 8s too this morning. The 8s are likely to be re-tested as support early today. There are no objectives below the market whilst the contracts are above the 5s, around 57.10 WTI; 60.85 Brent; 197.06 Heat; 157.20 RBOB; and 556.75 Gasoil. Whilst the contracts may well re-test the 8s, should they hold the odds are then on a recovery to the 13s – these are serious resistance and the key to any significant recovery. They are dangerous resistance and are around 59.85 WTI; 63.79 Brent; 202.64 Heat; 163.20 RBOB; and 575.50 Gasoil. WTI has moved over both the 5 and 8s around 57.10 (8) and 56.42 (5). There are no targets lower whilst the 5 holds. A move confirmed by a close (m/c) below would be a sell for a move lower to 52.24. Watch the action around the 8 today. It is entirely possible that if the 8 holds then we will see a slingshot (s/s) rally to the 13, around 59.85.

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Posted by Robin Bieber