SET : One bad day, and the lower gap (957-951) will be closed
February 24, 2011 Leave a comment
Things are heating up in Libya, and the worst is still to come
Latest news flow suggests to us oil will manage to hold above US$100 today, and probably over the weekend
The directors of several oil companies in the Gulf of Sidra region of eastern Libya announced they were splitting from embattled leader Moammar Gadhafi and had “pledged loyalty to the people,” Zawya Dow Jones reported Feb. 23.
The Gulf of Sidra is critical to Libya’s energy exports. The ports of As Sidra, Marsa el Brega, Ras Lanuf, Tobruk and Zuetina handle approximately 77 percent of Libya’s oil exports. Allegiances in the Gulf of Sidra and the economic value they represent, therefore, are key to the survival of Gadhafi’s regime.
The SET’s first support zone at 982-983 really shouldn’t hold in our view, with 976-978 seen as a slightly stronger VST cushion. However the market can come off quite bit further – all it needs is one ay of heavy foreign selling and it will come off and close the day chart gap created last week from 957 down to 951.