Unleaded Gas futures continue posting new highs in what appears to be a strengthening of the bull market in the broader crude oil complex. The latest price action in the Unleaded market has developed into a very well formed Rising Wedge chart pattern, shown here on the 240-minute time interval.
This formation often represents a continuation pattern, which hints at the likelihood of a breakout to the upside to carry on the rising price trend established by the market prior to the Rising Wedge. The pattern is not entirely completed, but is nearing the apex of the wedge, suggesting that a breakout is going to occur in either direction during this week's trade.
A breakout to the upside would represent new contract highs for the nearby Unleaded gas futures, and could drive the market to test the $4.00 per gallon price level for the first time since the run-away rally in the oil complex during the first half of 2008.
Traders should watch this Rising Wedge for key support and resistance levels, with a possible Breakout signal initiating on push out of the wedge.
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