Technical & Fundamental Oil Reports Specialists

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Watch the 8 and 13 day MAs. They hold the clues.

Published Wednesday, July 13th, 2016

Introduction.  RBOB’s wavering stochastics, and the fact that four out of the five contracts had held their 100 or 200 day MAs were the clues yesterday that a correction was on the cards. The bears had had a good run and by hitting the 100 or 200s the contracts had completed a price cycle. This correction was large and impressive but needs to be kept in perspective. The contracts are all still below the 13 day MAs, and in WTI, RBOB and Gasoil’s case below the 8 day MAs too. If the market has further upside – something not to rule out – then it must move and close (m/c) over both the 8 and 13 day MAs. These s/t MAs are extremely important – yesterday the rally was halted, virtually to the cent, by the 13 day on Brent, Heat, and Gasoil. The early clues today will be on RBOB – it is above the 5 around 139.10 but below the 8 around 141.63. The action at the 8 will be the key – below the 5 and we have a “bull trap” scenario; but above the 8 and the odds are on tests of the 13s and more attempts to push higher. The 5, around 139.10, is very important but the 8, around 141.63, is the most important pivot on the board today – watch it carefully.

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Posted by Robin Bieber