EUA, Carbon Emissions, Favour Short Term Bears

The Commodity Specialist view - Price swings over the last few months have kept the charts in consolidation mode, below a long term key Fibo resistance level. Recent losses have temporarily tilted the scales more in favour of the bears, but losses should prove temporary in the grander scheme of things.

• WEEKLY CHART – CONTINUATION: The 38.2% recovery level has proved a tough barrier to push through, and remains first key resistance on this long term chart. The multi-month consolidation is now seeing more of a sagging in price but this should ultimately be temporary ahead of a later (postponed for now) break above that 38.2%.
• DAILY CHART – DEC-09: This week’s break below rising support around 13.00 confirms that s/term bears are in control. We think that s/term rallies will prove temporary/corrective ahead of further weakness. Resistance-wise first note the prior Oct lows around 14.00 and 61.8% bounce level at 14.06. Then the 76.4% level at 14.43 and falling resistance line just above. The 12.00 area is something of a minimum target (note the small bear channel base just below here). But also keep in mind an interesting Fibo projection at 11.60, currently coinciding with a larger bear channel base – better support could be seen here.
• Ahead of the targets being neared, the ideal sell area looks to be around 14.00, if seen, with stops above the 14.43 76.4% level and falling resistance, say 14.60. 12.50 would be targeted for partial profits, stops reducing to cost. Traders choice whether to target 12.00 or towards 11.60 for more.

[For the complete and illustrated version of this and future Updates be sure to sign up at www.sevendaysahead.com]