Technical & Fundamental Oil Reports Specialists

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Watch the 8 day MAs – They hold the clues

Published Thursday, March 19th, 2015

The rally and firm closes negated targets lower yesterday. There is a lack of technical harmony right now and one is advised to be careful. The daily stochastics have all flipped positive at low levels. This is constructive. However, the short term MAs are a problem and by no means bullish yet. WTI – already increasingly de-linked from the rest – is the only contract below all the s/t MAs and specifically below the 5. Brent is above the 5 but below the 8 and the rest are above the 5 and at or just above the 8s. In these stochastics versus MA battles the MAs usually win, largely because they are trend following and there are more trend following moves than sustained corrections. This is simply percentage logic not brain surgery. Therefore the message is watch the 8s today like a hawk. If the contracts remain over them then look for slingshot move higher to the 13s and targets south would remain on hold. A failure at the 8s would mean a move lower to the 5s and a resumption of the downside momentum.

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Posted by Robin Bieber