Oil Jan – 23
January 23 Futures – Technically bullish on the last report, the downside move below USD 94.53 meant the technical had a neutral bias, resulting in the USD 92.33 fractal support being tested and broken. The technical is now bearish, with the futures trading to new lows on the open on the back of the weak close yesterday. Upside moves that fail at or below USD 96.89 will leave the futures vulnerable to further tests to the downside; above this level, and the technical will have a neutral bias. We are technically bearish, but flat moving averages would suggest we are not in a trending environment; the new low today has created a minor positive divergence with the RSI, not a buy signal; it will need to be monitored. Price action is weakening, but the trend is not defined at this point; downside moves below USD 88.77 or a close below USD 90.64 will warn that the USD 83.65 low is vulnerable.
Iron ore
Dec Futures – Technically bearish last week, with key resistance to follow at USD 90.16. The futures moved higher on the back of some easing of COVID restrictions in China, resulting in resistance levels being broken. The technical is still bearish but with a neutral bias; upside moves above USD 96.05 will mean the intraday technical is bullish, whilst above USD 97.30, the daily technical becomes bullish. Downside moves that hold at or above USD 82.81 will support a near-term bull argument; below this level will leave the USD 75.35 low vulnerable. The futures are now approaching key resistance at 97.30 that could take the technical into bullish territory; however, it is worth noting that the intraday 4-hour technical is in divergence, warning we could see a momentum slow down and potentially a technical pullback, providing the divergence does not fail. We also highlight the stochastic at 96.50, which is a key long-term resistance; if the stochastic pulls back and holds above 50, then we could see resistance levels come under pressure; if it breaks 50, then look for further technical weakness. A bit of a mixed technical; we are bearish/neutral, with price and momentum at key resistance levels; if resistance holds, we could see a technical pullback soon.
US HRC
December Futures – We noted last week that we could potentially be seeing some form of Elliott wave extension to the downside. The futures traded down from USD 659 to produce a new low at USD 621 before moving higher again (Current price USD 683). Upside moves that fail at or below USD 699 will leave the daily technical vulnerable to further tests to the downside; above this level, the technical has a neutral bias, and only above USD 740 is the daily technical bullish. However, this is where the technical is conflicting; the futures traded to a new low and created a positive divergence with the RSI on the intraday; the upside move above USD 670 has broken a key intraday fractal resistance, meaning the lower timeframe technical is now bullish. The Elliott wave cycle is now very unclear, as a new low was achieved, suggesting market sellers should be cautious as resistance levels could now come under pressure.
Tanker TD3
December Futures – Technically bullish last week, with the RSI also making new highs, suggesting downside moves should be considered countertrend. The Futures have traded back above the USD 22.1510 high to USD 22.2150. However, the RSI has held resistance with price moving lower; downside moves below USD 21.6600 will indicate the futures are entering a correcting phase. Key near-term support is at USD 20.3228; corrective moves lower that hold at or above this level will support a near-term bull argument; below this level will warn we could be entering a larger corrective wave 4. If this is the case, key support will move to USD 17.7497, as this is the 66% retracement of wave 3 (USD 15.4930 – USD 22.2150). Based on Elliott wave analysis, we maintain that downside moves should still be considered a countertrend; however, with the RSI now holding resistance for the third time, it is a warning that we could soon see a technical pullback, implying near-term support levels could be vulnerable.
Coking Coal
December Futures – As noted previously, near-term price action remained bullish, but the technical move to the upside looked countertrend; the potential to diverge above USD 327 warned we could see the technical weakening soon. The futures have moved USD 52.00 lower with the price below the 8-21 period EMA’s supported by the RSI below 50; the technical is now bearish. Upside moves that fail at or below USD 309 will leave the futures vulnerable to further tests to the downside; above this level; the technical will have a neutral bias. Only above USD 327 is the technical bullish. Downside moves below USD 270.50 will warn that the USD 245.50 low is vulnerable. Technically bearish, the RSI is making new lows, suggesting upside moves should be considered countertrend.