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Prices Continue to Advance

Weekly Continuation with a 2 Deviation Bollinger Band

Weekly Continuation with a 2 Deviation Bollinger Band

Daily Continuous

Daily Continuous

Major Support: $3.114, $3.045, $2.956, $2.874, $2.836, $2.762, $2.711, $2.704

Minor Support: $ $2.938, $2.783, $2.704, $2.695, $2.61

Major Resistance: $3.257-$3.297,$3.341, $3.431

The gap from Jan 30th is now closed and the early run went all the up above near term resistance before folks figured out that the run was little over-extended and started to take some profits.  This run is strong as acid and continues on a combination of fundamental data (gulf production declining) and a component of fear about the upcoming winter.  The run took prices well above the 3 standard deviations above the 20 week SMA before some profit taking set in.  I cannot recommend adding to length currently at these levels but further retracement into the low $3.20’s or below may be a better place to advance purchases.  Perhaps we are in a “blow off top” but the struggle against ending inventories will be with us for a month yet and would expect further gains.  The run has just made it difficult to add here.  The market will consolidate and my guess is that the range will be between $3.15-$3.25.

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