Halister News

(Bloomberg) -- OAT1 generic contract could be pressured toward its March low at 144.73 after rally reaches exhaustion point against upper-end of a two month trend-channel, Bloomberg technical analyst Sejul Gokal writes.

• See chart here; OATM7 (June) now -13 ticks to 147.16
• Contract rolling over against the top-end of a two month channel at ~148.36 with reversal studies flagging a ’10’ candle session count which typically warns at stall or turn in trend
• Behavior of MACD histogram also reflects loss of momentum
  • Negative divergence was exhibited as contract made new multi-month peaks in early April
• Generic contract holding above 146.80, which is the point- of-control of March, according to Market Profile framework; below here could signal move to March’s lower value line at 145.30
  • NOTE: point-of-control is where there has been highest price activity (i.e. fair value), and can be seen as support; area between lower and upper value lines captures 70% of the price distribution
• Supports in focus:
  • 146.51 -- 50% of March/April rally
  • 146.09 -- 61.8% of March/April rally
  • 145.57 -- 76.4% of March/April rally
  • 145.11 -- Channel base
  • 144.73 -- March low
• Risk level for bears at 148.30 at close
• Jitters over the outcome of the France’s presidential election have increased after the far-left politician Jean- Luc Melenchon jumped in the latest polls (see more on French Election Risk here)

• NOTE: Sejul Gokal is a FICC technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice