$UGA getting set to rip higherTarget would represent a 25% gain in the ETF. Wait for the breakout, then pounce
UGA
Are gasoline prices heading back to 2.00 dollars a gallon? $ugaWholesale gasoline futures could be telling us that the driving demand is bad and just not there to support these high prices. War and geo politics is pushing Crude Oil prices up as well as the heating related products, but gasoline is trading on its own forces currently. With the rejection at around 4.00 a gallon, is the support here or are we destined to look for support lower?
LONG UGA @ $8.50#Gasoline $RB_F RBOB futures bottom close here at $.54 as gasoline crack spread (difference between spot price of crude oil & gasoline) looks to be bouncing from lows.. Hourly chart showing capitulation volume & bullish RSI divergence suggesting downtrend weakening $UGA $USO $VLO - Twitter Post @CashFlo @ 10:53AM CST
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There it is.. #Gasoline $RB_F RBOB futures likely long-term bottom here @ $.46 with massive capitulation volume & hammer candle rally back over $.50 or $UGA $8.80.. Expect gasoline futures upside rally to backtest 10dayEMA @ $.80 spot price or $14 $UGA stock price $USO $VLO - Twitter Post @CashFlo @ 1:27PM CST
Playing this upside move with UGA October 16th $16 calls @ 1.00
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Gasoline futures stable while WTI swings $UGA $USOPrompt-month RBOB futures have been very quiet relative to the antics in oil. 75 cents appears to be very important.
Play the Rebound on Oil and GasolineStory : For a number of highly-discussed ab debated reasons, that do not need to be presented here, petrochemicals have seen a substantial devaluation over the course of the last 2 months. While the view from a macro-perspective remains bearish, a rebound from the recent sharp downturn would not a surprise.
Note : The trades presented offer a 1 to 1.75-2.0 risk/reward and are positions taken in my portfolio.
LONG UGA @ $28.50 for Gasoline Futures bounce from $1.64Gasoline Futures (RBOB Gasoline Futures) likely counter trend bounce here off 200weekSMA support at $1.66 to reclaim long-term moving average support of 50monthSMA at $1.70, then rally to test 100weekSMA resistance at $1.80.
Technical Analysis:
- Gasoline Futures (RBOB Gasoline Futures) now testing long-term support of 200weekSMA at $1.66.
- $1.66 also strong price support from Feb 2018 for potential double bottom pattern
- Daily & Weekly RSI extremely oversold
- Daily MACD record lows
- 50monthSMA long-term support sitting at $1.70 to continue uptrend from 2016 lows
- Potential bottom hammer candle on hourly chart today at $1.66
Fundamental Analysis:
Over recent weeks, we have seen an almost perfect bearish storm in the Crude Oil market that sent the price of futures from a high of $76 to low of $61, a decline of about 19% in less than one month. Rising production, increasing inventories, a strong dollar, concerns over trade, and the realization that the sanctions on Iran include some exceptions, all led the price of the energy commodity lower in a dramatic corrective move. These factors have had a greater impact on its bi-product Gasoline, which is also undergoing a seasonal bearish period during the winter months. However, we feel this move has been overextended to the downside as there are still 3 fundamental reasons why oil is close to low and could spark a counter trend rally in Gasoline.
- Turmoil in the Middle East could result in a decrease in production and rapid price increase
- OPEC expected to cut production at their bi-annual meeting Dec. 6th
- Pullback of USD from highs due to US election results could relieve some of the bearish weight on commodity prices
- Demand for the energy commodity remains strong with increasing population and rising heating oil cracks
United States Gasoline Fund Testing Rising Channel SupportUnited States Gasoline Fund Testing Rising Channel Support and downtrend resistance with FIBO levels
Major Deflation Indicator Alert, UGAOver the past two months, the United States Gasoline Fund, LP (NYSEARCA:UGA), which tracks gasoline has fallen around 14% from the recent top of $64.27, to a low of $55.16. The drop in the UGA share price occurred after the stock broke a technical major trend line level.
Many talking heads in the media are looking at this drop and saying that it will benefit the economy. They are promoting that this should be viewed as a positive for the markets going forward. This banter from the talking heads contrasts their words when the UGA rises. At that point they are quick to point out how the increase is viewed as a tax hike on working Americans, and that it has a negative impact on the markets. But is that the case?
During the financial crisis of 2008, this leading indicator of inflationary or deflationary pressure bottomed out three months prior to the markets. The United States Gasoline Fund, LP (NYSEARCA:UGA) made a low of $16.10, during December of 2008 and never looked back. It continued to make higher highs and higher lows until topping out during mid June. The UGA led the markets, until recently. The sharp sell off in the United States Gasoline Fund, LP (NYSEARCA:UGA) is a sign of deflation creeping into the markets, it is certainly something we must pay attention to.
With all the geopolitical tensions around the world, oil and gasoline prices should not have fallen as sharply. The United States Gasoline Fund, LP (NYSEARCA:UGA) as well as oil prices are telling us things contrary to what the media or governments want us to believe; that there is a major slow down in the global economy. The chart of the United States Gasoline Fund, LP (NYSEARCA:UGA) is confirming that.
As traders all we look to do is to be on the right side of any trade. Just like how we alerted readers of the Rant & Rave blog HERE, warning them of the bearish set up on oil indicating a move lower was coming. We also alerted members of the Elite Round Table of a Head and Shoulders top in play, when the United States Oil Fund LP (ETF) (NYSEARCA:USO) closed below $36.92, as a time to go short the stock and sector; our profit target was $34.40 and we all made a great profit on that trade all by following the charts and not the media noise.
Now there will be a great buying opportunity for these commodities, and with the right set up on the charts, another shorting opportunity as well. Regardless of the direction of the markets, there is always a trade to profit from it. Come join us as continually and consistently provide calls like these from the past month and more. For market moving news as well as important updates make sure to join our mailing list here. Or bypass the free content and get right to the money making action, join us at the Elite Round Table now.
