Technical & Fundamental Oil Reports Specialists

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Down trend but watch the 5 day MAs and Oct RBOB at 122.65.

Published Thursday, August 27th, 2015

Introduction. The trend remains down, but we could easily be moving into a corrective phase. The key is the 5 day MAs – moved confirmed by closes (m/c) above these tricky and hazardous MAs would point to more recovery yet. It’s always tempting to be calling for a bottom every time the contracts react up a bit, and feel the down trend is over. Resist the urge to bottom pick – the hallmark of this (and virtually every) down trend are failures at the 5 and 8 day MAs. This one is no different – every correction higher since June has failed at the 5 or 8 day MAs, despite the odd breach but not confirmed by a close. Treat this one no differently. It’s entirely plausible that the contracts rally over the 5s – the crudes are already attempting this – and head for the 8s. The 8s are a sale unless closed over. The contracts are still not harmonious and it’s advised to keep exposure limited. For the moment targets south are on hold.  WTI has no target lower. It is just above the 5 day MA around 39.19, and could easily try to test the 8 day MA around 40.21.

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Posted by Robin Bieber