LONG UGA @ $28.50 for Gasoline Futures bounce from $1.64
Gasoline Futures (RBOB Gasoline Futures) likely counter trend bounce here off 200weekSMA support at $1.66 to reclaim long-term moving average support of 50monthSMA at $1.70, then rally to test 100weekSMA resistance at $1.80.
Technical Analysis:
- Gasoline Futures (RBOB Gasoline Futures) now testing long-term support of 200weekSMA at $1.66.
- $1.66 also strong price support from Feb 2018 for potential double bottom pattern
- Daily & Weekly RSI extremely oversold
- Daily MACD record lows
- 50monthSMA long-term support sitting at $1.70 to continue uptrend from 2016 lows
- Potential bottom hammer candle on hourly chart today at $1.66
Fundamental Analysis:
Over recent weeks, we have seen an almost perfect bearish storm in the Crude Oil market that sent the price of futures from a high of $76 to low of $61, a decline of about 19% in less than one month. Rising production, increasing inventories, a strong dollar, concerns over trade, and the realization that the sanctions on Iran include some exceptions, all led the price of the energy commodity lower in a dramatic corrective move. These factors have had a greater impact on its bi-product Gasoline, which is also undergoing a seasonal bearish period during the winter months. However, we feel this move has been overextended to the downside as there are still 3 fundamental reasons why oil is close to low and could spark a counter trend rally in Gasoline.
- Turmoil in the Middle East could result in a decrease in production and rapid price increase
- OPEC expected to cut production at their bi-annual meeting Dec. 6th
- Pullback of USD from highs due to US election results could relieve some of the bearish weight on commodity prices
- Demand for the energy commodity remains strong with increasing population and rising heating oil cracks
Technical Analysis:
- Gasoline Futures (RBOB Gasoline Futures) now testing long-term support of 200weekSMA at $1.66.
- $1.66 also strong price support from Feb 2018 for potential double bottom pattern
- Daily & Weekly RSI extremely oversold
- Daily MACD record lows
- 50monthSMA long-term support sitting at $1.70 to continue uptrend from 2016 lows
- Potential bottom hammer candle on hourly chart today at $1.66
Fundamental Analysis:
Over recent weeks, we have seen an almost perfect bearish storm in the Crude Oil market that sent the price of futures from a high of $76 to low of $61, a decline of about 19% in less than one month. Rising production, increasing inventories, a strong dollar, concerns over trade, and the realization that the sanctions on Iran include some exceptions, all led the price of the energy commodity lower in a dramatic corrective move. These factors have had a greater impact on its bi-product Gasoline, which is also undergoing a seasonal bearish period during the winter months. However, we feel this move has been overextended to the downside as there are still 3 fundamental reasons why oil is close to low and could spark a counter trend rally in Gasoline.
- Turmoil in the Middle East could result in a decrease in production and rapid price increase
- OPEC expected to cut production at their bi-annual meeting Dec. 6th
- Pullback of USD from highs due to US election results could relieve some of the bearish weight on commodity prices
- Demand for the energy commodity remains strong with increasing population and rising heating oil cracks
Comment:
Added to UGA calls and common stock here at UGA $26.80 or Gasoline futures $1.55
Comment:
Saudia Arabia and Russia production cut catalyst still in play with Russia confirming today that a cut is needed.
US and China trade deal could likely involve US Oil. One possible deal could be that China will need to import US Oil for a premium or fixed amount. This would solve trade deficit issues as well as oversupply issues, meanwhile increasing Oil/Gasoline prices due to increased demand.
US and China trade deal could likely involve US Oil. One possible deal could be that China will need to import US Oil for a premium or fixed amount. This would solve trade deficit issues as well as oversupply issues, meanwhile increasing Oil/Gasoline prices due to increased demand.
Trade closed: target reached:
Out all UGA at $31.50 +25%