Friday, April 26, 2013

EUA Dec13: Boring chart despite looming compliance deadline

Since the European Parliament rejected the backloading proposal the EUA Dec13 is trading in an EUR 1 range between EUR 2.50-3.50. The doji candle on the day before the vote sent the already a negative signal that was strengthened by the huge black candle formed on April 16. On the same day the MACD slipped into negative territory.

The bearish technical picture got another boost yesterday when the 20-day moving average crossed the 30-day moving average from above.

On a market moving just sideways the best trading strategy one can suggest is buying at the bottom of the range (EUR 2.50) and selling at the top (EUR 3.50).

A cancelled auction or a new tweet about backloading can force the price out of the range. Major losses can be limited by setting stop-losses.

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