Technical & Fundamental Oil Reports Specialists

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Watch RBOB carefully. Market is in trouble – be careful

Published Thursday, February 19th, 2015

RBOB gave the prescient early warning signal yesterday that all was not well with the recovery and that a dip was likely. The big question now is does the dip continue and the bears gain control of the market. The answer to this probably lies yet again in RBOB’s hands and how the contracts fare around the short term (s/t) MAs. A snap shot of this morning’s action gives us WTI and RBOB below all the s/t MAs – the 5, 8 and 13s – but RBOB is only just below the 13, around 156.41, by 10 points at the moment. Brent and Gasoil are below the 5 and 8s but holding the 13s; Heat below the 5 but above the 8 and 13.  The odds are that these MA supports will come under pressure later today and sorely test the validity of the recent move higher. Moves confirmed by closes below would open the way for more weakness. Apr’ WTI is in trouble. It held the s/t MAs by the close last night but this morning is below them all. They start around 52.00 (13), then 52.33 (8) and finally 52.85 (5). These are likely to be tested on an attempt to recover early today, but it’s the action later that counts. The next support is at 49.90 and this is likely to be tested soon on a failure to move back over the s/t MAs.

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Posted by Robin Bieber