Gas Prices (both commodity and retail) have been range bound for the past two years or so. It’s trended both up and down pretty well in the range. However, I think gas prices are setting up for a major move soon. I’m not predicting one way or the other, but the way it has been setting up technically means that we should be seeing a big move up or down. A case can be fundamentally made for both (Mid-East disruption, Global Recession, etc). But I’m here to take a technical look.
Below is a monthly chart of RBOB Gasoline dating back to late 2005. I have a few technical lines drawn. First let’s take a look at the two horizontal lines. We have major support (green line) at ~$2.50 and heavy resistance (red line) at ~$3.40. Next you will see two teal (light blue) diagonal lines. As you see, there is a symmetrical triangle formed here.
What we should watch for is a break (and close) above either side. I think we can see some heavy momentum if we break to one side AND especially if we take out the respective support or resistance. If we were to break-out, I’d be expecting a test of the 2008 highs of ~3.60. If we broke down, I’d look at the 1.80-2.00 range for support.
One other thing to watch for is oil (both brent and crude) for a signal. Personally, I have a feeling we can see a break to the downside because:
A) A better argument can be made for (either good and/or bad) deflation rather than inflation.
B) The Potential Head & Shoulders Pattern that has formed.
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Posted by TheArmoTrader on April 23rd, 2013 at 11:30 pm, Comments: 0
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Posted by TheArmoTrader on April 23rd, 2013 at 12:16 am, Comments: 0
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Jerry Khachoyan is currently an undergraduate student at UCLA pursuing a degree in Political Science. He started trading in September of 2008. He concentrates on using technical analysis and reading the tape to enter the best risk/reward trades. The stock market to him is one of the greatest inventions by man.
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- What’s On The Horizon For Natural Gas?
- The Fed Should Just Print Money & Send It To People
- Banks Are Underperforming The Market
- Why The Jobs Report Is The Most & Least Important Economic Data Release
- Apple Got Its Bounce….Now What?
- The Hyperinflation Bet Never Made Sense
- Paging Dr. Copper
- Has The Market Just Been Consolidating For A Decade?
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- Gold’s Last Stand?
- Gas Prices More Than Stable
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