New York Harbor RBOB Gasoline Futures (NYM.RB) opened Wednesday's session at $2.6369 per gal., slightly less than Tuesday's close. But, NYM.RB managed to fill up the tank and rally a 'big'* 5.1% to end the day at $2.7736. The gain came on a 'trend day' up pattern, where the open was in the lower 20% of the day’s range while the close was in the upper 20%. Furthermore, NYM.RB also crossed above its five-day moving average.
*One-day percentage gain is more than one standard deviation stronger than the average one-day percentage change measured over the last 30 trading days.
Q: How has NYM.RB performed in the past, omitting repeat occurrences within 10 trading days, when, while crossing above its five-day moving average, it has rallied 'big' on a 'trend day' up pattern after opening the day lower than the previous day's close?
A: According to the 10 previous occurrences of this event, EventEdge indicates that NYM.RB has shown a strong bullish edge that peaks 20 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Wednesday, April 2, 2008) is Wednesday, April 30, 2008.
NYM.RB rallies in 90% of the cases (9 of 10) by an average of 10.1% relative to the close on the event date. The one decline was 5.5%. The overall return of the 10 cases is 8.5%, which, based on the close of NYM.RB on the event date ($2.77.36), provides a target price of $3.0094.
If you would like to see more details of this historical edge, go to www.markethistory.com
To view this idea in our EventEdge® analysis tool click here.
Ronish Patel is an analyst with MarketHistory.com.
