Buy GasolineThis is just a journal for me. I strongly warn you to not take this in your real account. Good luck!
A7L1! trade ideas
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
Crack Spread close to its extremeWe think it is worth to have an eye on this crack spread between gasoline and heating oil. The reason is simple: this spread is close to its lower end of the range and therefore close to its extreme. We will buy this spread when the spread reached -0.40. In this case, we buy RB and sell HO.
Gasoline forecast until end of year (RBOB)Looks like the price will remain in this channel until the end of the year, look out for confirmation of the long movement, then short when you get confirmation of the movement down from the top.
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Eroding Gulf Coast Crack Spreads--Bearish for refiners like VLOBrent vs. WTI spread continues to remain strong and pulling up the value of Gulf Coast crude, which in turn is driving erosion in Gulf Coast crack margins (represent by blue line on the chart). Valero stock price (candlesticks on the chart) is reacting to deteriorating refined products margins. Bearish until crack spreads reverse course.
Short RBOB @ 1.9910Moderate down trend strength. Below SMA 50, below SMA 150. RSI14 crossed below 40.
1D Rectangle. Neutral trade. Scalping.Gasoline is trading sideways within a 1.9950 - 2.1890 Rectangle on 1D. The neutral 1W RSI = 47.963, ADX = 14.795 but most importantly its High Volatility (ATR = 0.1150) should keep the sideways trade intact. We are long, TP = 2.1295.
RDOB Gasoline showing an upward trend with LONG SIGNALSame strategy as the related ideas below.
Currently reading a long signal. Is that because Winter is approaching in the northern side of the sphere?
Strategy
Refer to BTCUSD and TRNUSDT related ideas below for detail into strategy, which works well with only high volume/volatile coins.
Summary: All indicators must cross to give a strong buy/sell signal
i.e. fibonacci lines, bollinger bands , macd , rsi must be crossed simultaneously.
PNL = +13.8%
Max Drawdown = 0.2% !!!
2 closed trades in total spanning ~4+ months (over 3% profit a month)
p.S. its a shame the graph above doesn't allow you to scroll back to view the whole range of time :(, but you can still view all the trades below
RBOB GASOLINE Future JUL18 (1d)Trading Signal
Short Position (EP) : 2.0840
Stop Loss (SL) : 2.1017
Take Profit (TP) : 1.9881, 1.9002
Description
RB formed Double Repo Failure Sell at 1d time frame. Trade setup with Sell Limit at 0.382 Level (2.0840) and place stop after 0.618 level (2.1017). Once the position was hit, place take profit before an agreement (1.9881) and 1.9002
Money Management
Money in portfolio : $80,000
Risk Management (2%) : $1,600
Position Sizing
$0.0001 = +-$4.20 (Standard)
Commission fee = -$2.47/contract (Standard)
EP to SL = $0.0177 = -$743.40/contract (STD)
Contract size to open = 2 standard contracts
EP to TP#1 = $0.0959 = +$4,027.80 (STD)
EP to TP#2 = $0.1838 = +$7,719.60 (STD)
Expected Result
Commission Fee = -$19.76
Loss = -$1,486.80
Gain#1 = +$4,027.80
Gain#2 = +$7,719.60
Total Gain = +$11,747.40
Risk/Reward Ratio = 7.90
Gasoline Entering holiday weekend and hurricane after effects, we should see a few weeks of significant draw downs in inventory.
