Monday, June 11, 2012

Carbon rallies on Spanish banks bailout and Stop-Loss orders


Carbon rallies on Spanish banks bailout and Stop-Loss orders

Wider financial markets rose today in the morning following the news that Spain is seeking for a 100 bn euro bailout for its banking sector. Carbon - seen as a risky investment - also received some of this "positive wind" and rose by more than 2% in the first minutes of trading. Stop-Loss orders (short covering, but also buying into the rally) could have played a significant part as well.


Since the decline started in February [see chart above] (peaking above 9.60), we had few attempts to break out from this trend (end of April ~ 7.65; end of May ~ 7.05) and now we can see yet another attempt.


Carbon will most likely want to retest the breakout from 6.70. Should the positive mood prevail, we see carbon prices being supported @ 6.63 euro with further attempt to break and remain above 6.83, possibly target 7.00+ again.

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