Technical & Fundamental Oil Reports Specialists

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Poor action. Lower likely, but beware “bear trap” danger

Published Tuesday, October 27th, 2015

Introduction. RBOB’s failure to hold over the 5 and 8 day MAs was the nail in the coffin to the view that the market was holding. The fact that the crudes had frequently failed at the 5 day MAs was already worrying, but by no means conclusive. RBOB dealt the blow as it slid below the 5 and 8s and then the rest followed. It’s early days yet so be careful – any rally back over key levels today would point to last night’s action being a “bear trap”. However, at the moment, last night’s closes have green lighted targets lower on Brent to 46.90; Heat to 141.27; and RBOB to 127.26. WTI needs to move and close (m/c) below 43.88 to have an objective to 42.78 and Gasoil needs to m/c below 437.00 to activate a leg down to 427.50. WTI held just above the key c/p at 43.88 last night but is below there this morning. A m/c below this evening would confirm a target to 42.78, a continuation c/p. The next target south after 42.78 would be 42.03. Initial resistance is at 43.88 and a m/c back over here would negate the target south. The 5 day is around 44.53 and a sale.

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Posted by Robin Bieber