Friday, December 9, 2011

Closing Bell

Carbon continued to rise gradually, "banging" on the resistance of 7.70 EUR for most of the day today. Squeeze towards the close probably took out further stop-loss orders but didnt break 8.00 EUR.

Wednesday, December 7, 2011

Closing Bell

Late last night carbon rebounded from the lows to close flat on a day. This could have made the traders think that going short big time at these levels is not a good idea anymore. This morning we had a big jump, and a lot of stops were taken out. If you had a short below 7.20 - your stop should have been taken out as well.

Previous short term support - 7.70 EUR - proved to be resistance for now (see the chart at the bottom of the post). However carbon found a floor @ 7.20 and may continue to rise tomorrow. We are seeing a textbook example of testing the 7.20 support - resistance at the end of the day.

We would recommend to limit short positions size and perhaps tighten the stops. Large volume traded @ 7.10ish could indicate accumulation on the market with possible upside for prices.

ECB is expected to announce another rate cut tomorrow, which can spark buying accross markets (similarily as happened when the USD rate cuts were announced) providing short term support also for carbon (along the support line).

Tuesday, December 6, 2011

Market Commentary

Carbon broke below 7.80 this week and with no real support in between 7.80 and 6.90 is penetrating now the "all-time-lows". We still don't recommend to go long on carbon.

Friday, December 2, 2011

Market Commentary

8.60 EUR proved to be resistance and prices went back to around 8.00 EUR. Last two days carbon trading sideways. It didnt stay in the marked corridor, nevertheless 7.80 still provides some support.

"The European Commission today delivered 300 million phase 3 allowances to the European Investment Bank (EIB). 200 million allowances need to be monetised within 10 months from the date of delivery, i.e. by 2 October 2012, in order to allow the Commission to adopt award decisions for successful bidders in the second half of 2012."

This implies an indicative volume of sales of 20 million allowances per month. Actual monthly volumes of monetisation will be set with a view to minimise any impact on the secondary market. In mature markets this should be already reflected in price, as NER 300 sale is old news, however the belief is that it will put further downward pressure on prices.