New York Harbor RBOB Gasoline Futures (NYM.RB) dropped 3.6% on Wednesday to close the day at $3.0344 per gallon. After trading at record highs less than two weeks ago, RB has 'ran out of gas', crossing below its 50-day lowest low on Wednesday; sinking to an intra-day low of $3.0210 per gallon. The recent bearishness also pushed RB to cross below its 100-day moving average. It may be time for the bulls to refill the tank.
Q: How has NYM.RB performed in the past after crossing below its 100-day moving average?
A: According to the 11 previous occurrences of this event, EventEdge indicates that NYM.RB has shown a strong bullish edge that peaks eight trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Wednesday, July 23, 2008) is Monday, August 4, 2008.
NYM.RB rallies in 91% of the cases (10 of 11) by an average of 5.7% relative to the close on the event date. The one decline was 4.2%. The overall return of the 11 cases is 4.8%, which, based on the close of NYM.RB on the event date ($3.0344), provides a target price of $3.1801.
Note that the 1st Graph omits the 10-day skip. The second graph depicts the same event with the skip. In this case, there are only eight previous occurrences, but peaks just one trading day later. RB rallies 100% of the time by an average of 1.9%, providing a target price of $3.0921/gal.
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Ronish Patel is an analyst with MarketHistory.com.
