RBOB Gasoline futures (symbol: RB) have been trading in the $2.44-3.48/gal range since Apr11. The recent gap up in price is notable for several reasons:
- the gap up traded above the minor downtrend line which originates at the Sep12 high
- volatility shows a recent uptick
- stochastics have turned upward, and
- we’re entering the gasoline season
The price gap higher is potentially a strong indicator of what’s to come, especially following the extensive period of price consolidation. Critical support lies at the $2.73, 2.58 and 2.44 levels.
In the short term, RBOB and Crude Oil seem a little over done. We’ll keep a close watch on the nature and extent of the retrenchment.
Murphy & Co’s RBOB Gasoline model is currently long. To learn more about Murphy & Co’s position models, visit http://murphycofutures.com/position-models/.