Diesel Technical Analysis and Short-Term Forecast
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June diesel rose to test and hold the 89 percent retracement of the decline from $4.2549, the equal to (1.00) target of the wave up from $3.5825, and the smaller than (0.618) target of the wave up from $3.8664 at $4.18 on a closing basis again. This has been a strong level of resistance for the past week, and there is potential for a triple top around $4.18 to form. Even so, prices settled just below this area, and prices are challenging $4.18 late this afternoon. The outlook for the next few days remains bullish, and a move above $4.18 to test the $4.237 smaller than target of the wave up from $3.1701 and the primary wave up from $3.5538 is favored. Closing above this will clear the way for a new contract high of at least $4.317 and likely $4.424 in the coming days.
Nevertheless, the 10-day DMI and ADX and the daily Kase Trend indicator are neutral. Moreover, the potential formation of a triple top warns that another test of support and more range-bound trading might occur instead. Diesel must settle below $3.866 to confirm the triple top. This is currently doubtful, but taking out $4.049 and settling below $3.942 will clear the way for a test of $3.866. Closing below $3.866 will confirm the triple top and call for a move to take out the $3.748 smaller than target of the wave down from $4.2549 to reach the triple top’s $3.564 target. Note that this is a key threshold that is in line with the 62 percent retracement of the rise from $3.1701 that held on a closing basis when prices fell to the $3.5538 swing low.
