Technical & Fundamental Oil Reports Specialists

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Watch the 5 and 8s

Published Thursday, July 7th, 2016

Introduction. By mid-morning yesterday targets lower were being hit on all contracts.  These were to 45.83 WTI (actually missed by 9 cents); Brent to 47.30; Heat to 144.08 then 143.42; RBOB to 139.79; and Gasoil to 418.75. At that time the 5 day MA was miles above the market probably in excess of $1.30 on Brent and with a similar margin on the rest and even larger on RBOB. A “5 day gap” of this size is almost never maintained and something had to give to narrow it. Add to this the fact that targets were being hit at very strong support and a rally was seriously on the cards. Moreover, look at a current chart on any contract, but RBOB, and one can see that this was a repeat performance – the market had been down at these levels twice earlier since mid-June and rallied from virtually the same spot. The ensuing rallies gave us a minimum move up of $4.00 per barrel – so far we have only picked up around $2.00 and are now seriously testing the 5 and 8 day MAs. These are potent resistances, where the contracts should fail, but moves confirmed by closes (m/c) over would then probably deliver us the missing $2.00 per barrel!!

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Posted by Robin Bieber