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The 5-day M/As are crucial today as is the 34-day on RBOB

Published Thursday, July 9th, 2015

There was an agreement between the five major contracts on Monday as far as the direction of the market was concerned – it was down. The first cracks appeared on Tuesday when some of the contracts lost a little bit of value and others closed higher. The disharmony became much more visible yesterday with Brent and Heating Oil closing somewhat stronger whilst RBOB went through the roof and WTI lost value. It is probably fair to say that it is RBOB that has come to the rescue of the bulls. Without this contract the complex would likely be much lower. It closed above the 5 and 8-day M/A last night and further buying has pushed it over the 13 and 34-day contract M/As that are 200.59 and 201.58. A close over them is constructive and should the contract settle above the 34-day continuation M/A at around 204.39 the others will receive a great amount of support. A close below the 5-day M/A at around 198.48, on the other hand, will make the strength of the last two days look like a bull trap. For the rest yesterday’s view is still valid.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.