Daily Commodities Update: Unleaded Gas |
By Jonah S. Ford
Unleaded Gas held key support at the $4.00 per gallon level before reversing higher to form a potentially bullish pattern for the week ahead. The price has been meandering inside of a large downtrend that forms a Flag chart pattern on the hourly time frame.
After rebounding from the price support shown at $3.98 per gallon, the market pressed gradually higher to the upper resistance trend line created by the flag. Monday’s session should either confirm a breakout by a move higher in the gasoline (which should be accompanied by a commensurate rise in crude oil), or re-establish this trend line as key resistance by falling back towards the middle of the pennant.
Traders should be watching this near term resistance level for confirmation if a breakout occurs, as it could signal the end of the current downtrend which began at the $4.20 per gallon level. Weakness coming into the market near $4.06 per gallon would set up for a pullback towards $3.94 per gallon to form a continuation of the Flag chart pattern.
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