Technical & Fundamental Oil Reports Specialists

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Watch RBOB – it holds the clues

Published Tuesday, January 5th, 2016

Introduction. Yesterday’s price action was extremely volatile and it’s likely to continue this way. Most contracts explored the extremities by testing both the support and resistance, and then finishing rather inconclusively in the middle. Those looking for the clear next direction must be patient. For the most part the contracts are stuck in the midst of the short term (s/t) MAs – they need to break away from these before any move is clear. Furthermore the crudes and Heat all rallied to the 21 day MAs and failed. These need to be moved and closed (m/c) over for any upside. RBOB remains the contract to watch. It is being held up by the 34 day MA around 127.49 and, although breached, the 55 day MAs are serious resistance at 129.62 and 130.12. The action around RBOB’s 34 and 55 day MAs will determine the next leg, but right now it’s stuck in the middle and patience is required. WTI closed poorly below all the s/t MAs but overnight has moved over the 13 day MA around 36.81, but remains below the 5 and 8s around 37.02 and 37.19. Use these as pivots. Below 36.81 and the odds are on lower numbers. There is strong range and long term c/p support at 35.35, and until this level is m/cd below there are no targets lower. The key to any upside is firstly moving over the 5 and 8s and secondly how it fares at the 21 day MA around 37.56. A m/c over 37.56 would be positive and make a move higher to the 34 day MA around 38.53 likely. Watch the action around the s/t MAs on this contract.

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Posted by Robin Bieber