HEATOIL breaks back below 20-day moving average
Heating Oil (HEATOIL) Technical Analysis Report for Aug 07, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, HEATOIL finished the week -0.46% lower at 1.2245 after tanking $0.0270 (-2.16%) today. Today's close at 1.2245 marks the lowest recorded closing price since July 1st. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 1.2465, the market confirmed its breakout through the previous session low after trading up to $0.0291 below it intraday.
Daily Candlestick Chart (HEATOIL as at Aug 07, 2020):
Friday's trading range has been $0.0388 (3.1%), that's slightly above the last trading month's daily average range of $0.0364. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HEATOIL.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 1.2122 (S1). The contract closed back below the 20-day moving average at 1.2489. When this moving average was crossed below the last time on July 30th, HEATOIL actually gained 0.29% on the following trading day.
Although HEATOIL is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the close-by swing low at 1.2111 where further sell stops could get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Heating Oil. Out of 250 times, HEATOIL closed lower 55.20% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 52.80% with an average market move of -0.85%.
With three out of the other four Energy Markets closing lower today, the ones that stand out on the negative side are GOIL losing -1.7% and GASOLINE closing -1.62% lower. On the flipside the best performer has been NATGAS closing 3.48% higher. Read more