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EUA, Carbon Emissions, Favour Short Term Bears

26 November 2009

The Commodity Specialist view -



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%.



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.



Philip Allwright

Mark Sturdy

Seven Days Ahead

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