Friday, December 13, 2013

EUA Dec13 moving against stock indices

And yes, He did it! Santa really has chosen the carbon market this year. 

While European and US stock indices gave back some of their earlier gains (DAX down 4.4%, S&P 500 -1.75%, DOW -2.22%, Nasdaq -1.55% from the end of November), the December brought some buyers to the carbon market. Before the Parliament plenary vote on Tuesday, 10 December, the price left the upper edge of the declining trend channel (red line on the chart). For two days it even traded outside the Bollinger bands and reached a 1-month high at 5.03 euro, but became overbought (RSI at 70.00) and we could see a correction on Wednesday, when the EUA Dec13 turned back below the upper Bollinger band. The positive momentum however is still valid, as the price didn’t return into the declining trend channel. 

4.70 euro seems to be a strong support at the moment. The price didn't go lower in the correction after the plenary vote even though the Climate Change Committee (CCC) seems to support the smoothest version of back-loading implementation.

The local high at 5.03 euro is a resistance for future price development. Further a local high at 5.51 euro from October.

All in all, price seems to consolidate between 4.70 and 5.04 euro. Please, keep in mind however that with the holiday season approaching volumes are decreasing day by day. After almost 30 million EUAs traded on Monday today we hardly reached 12,000 lots until the time of writing. On sleepy days like these it's easy to swing out from the above range with small orders.

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