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Watch the s/t MAs as good support and the key resistance on RBOB at 215.40

Published Friday, June 12th, 2015

The price action lower yesterday was not a huge surprise. The market started the day in resistance testing mode, but these resistances were and are very strong and significant, and the action was too far above the 5 day MAs for any comfort. Yesterday was a very good example of the 5 day gap theory – when a market has made a large move in any one direction and is too far away, in this case above, the 5 day MA. Something has got to give. Usually it’s the price action that corrects back to the MA. This is exactly what happened yesterday after failing at resistance, when the gap was over $1.25 – now it’s more like 25c. The contracts are above the short term MAs and the stochastics are positive. Whilst this remains the case the outlook is for more upside but the resistance is strong and impeding progress. The resistances are at 61.58 WTI; 66.05 August Brent; 194.24/59 Heat; and 596.00 Gasoil. The most important resistance on the board today is RBOB at 215.40 – the 13 month MA; more of that later.

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Posted by Robin Bieber