Commodities

Technical Analysis – Gasoline futures rally above 50-SMA

Posted on December 4, 2018 at 11:39 am GMT

Christina Parthenidou, XM Investment Research Desk

Gasoline futures (for December delivery) managed to violate to the upside the 50-period simple moving average (SMA) on the four-hour chart yesterday, for the first time since early November, recovering some of its longer-term losses following the fall from 751.50.

Today the pair jumped well into the Ichimoku cloud to touch two-week highs at 599.38, a sign that buying interest might continue to heat up as the MACD keeps gaining positive momentum significantly above its red signal line. Yet with the RSI approaching its overbought limit of 70, another pullback might be around the corner.

On the upside, traders would be interested to see whether the price can run above the top of the Ichimoku cloud seen around 607, while slightly above, a barrier could be standing at 614.13, taken from the high on November 21. Moving further up, the 622.31 area, which is the 38.2% Fibonacci of the sell-off from 751.50 to 542.63 and which acted as support in November, could stop the bulls as well.

On the other hand, a reversal to the downside and below the 23.6% Fibonacci of 591.63, could retest the 583.88 mark ahead of the 572 support. Slightly lower, the recent range between 565 and 552.38 could slow bearish movements, while even lower, the focus would shift straight down to the 542.53 bottom.

Summarizing, while a bull market looks to be in progress in the short-term, in the bigger picture the market continues to hold strongly bearish.

GSOIL futures

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