Wednesday, August 28, 2013

Is it a Shooting Star already ?

A fantastic pull back yesterday from 4.40, gave the market the impetus to go even higher, eventually breaking 4.50 and having a great closing in mid 4.50s, following some last minute buying and short covering. This morning, certain Stop Loss orders kicked prices up to 4.72 - up to the level of 200 MA (Moving Average), where it cooled down and pretty much immediately reversed to mid and low 4.60s - where it found the support for now.

However, looking at the large picture (larger time frame, here is Daily), we see a "Shooting Star" or an "Inverted Hammer" patterns that may (but does not have to) mark the end of the bullish trend (in short or long term) and the start of a correction / bearish trend.

It is only a mid-day here (at the time or writing), and may be too early to judge, but if you consider going long, perhaps this is not the best moment (please compare a "Hanging Man" pattern 15 candles earlier and the market reaction afterwards) to do so for speculative reasons. If you are already long, closing here for Profit Taking or tightening your Stop Loss could be a better idea.

Monday, August 26, 2013

4.30 stands the test

Continued support @ 4.30 - shown in large screen bids - combined with temporarily lower auction volumes - helped last week to push the price above 4.50, for the first time in 2 weeks. However, it didn't take long to see the market correction down to mid 4.40s (previously I marked 4.45 as possible resistance on the way up) where it seems to have stabilized (I say "seems" because due to UK bank holidays, the thin volumes are not the best indicator of the market condition).

Today the market moved in 4.40-4.50 range, with significant support @ 4.40 and reasonable volume on bids around 4.45 - testing the support after falling back from 4.50s. Interestingly enough, previous 4.30 support and today's strength above 4.40 fits nearly perfectly into Fibonacci retracement pattern - see chart above. Closing above 4.40 is still a bullish signal.

Thursday, August 15, 2013

EUA price upward march faces resistance

EUA price moves steadily up, creating a trend that started early in July from 4.05 euro level. Most of the days in July and August witnessed very low volatility of approx. 10eurocents a day, creating little incentives for daily traders, which, to some extent, may have affected liquidity. Most recent attempt to break above 4.60 has failed for now, but reasonably strong support at around 4.30 indicates that bulls have not yet given up. We have several moving averages around those levels: MA20 ~ 4.35, MA30 ~ 4.28 and MA50 ~ 4.32 all giving support. RSI around 50 is in neutral territory.

In short term traders may be seeing 4.45 as possible resistance and only breaking this level can pave the way for further gains.