Redshaw Advisors snip, March 15: (unedited)
| Price Action: The fortnightly influx of supply failed to bring about lower prices today as UKAs ended the day 4% higher. There was no hint of downside ahead of the auction as prices traded above last night’s close for almost the entire day. The upside gathered momentum in late morning trade to take the price back towards £38. The auction, in early afternoon, cleared above market and set in motion a rally that took UKAs to the day’s high at £39.10 in the final hour. However, there was some selling interest into the close at £38.70, a daily gain of £1.50. With EUAs heading in the opposite direction, the UKA discount to EUAs fell back towards €24. Outlook: UKAs continue to test the upper rather than lower bounds of the recent range as industrial buying interest supports prices on dips. In addition to the industrials, exchange data showed another increase in the long positions held by Investment Funds who have slowly and steadily built positions over the last few months, also explaining some of the strength. A test of the upper bounds could well be on the cards with £39.10, £39.40 and £39.91 the next hurdles. A break of the latter would tee up the 200d moving average at £40.28, an important level. Should the upside falter, the £36.50-36.89 range offers a number of support levels with a move back to £35 likely if they break. Elsewhere today, wider markets drifted lower again with power, gas and EU carbon losing 1-2%. UKA Closing price: £38.70 (€45.03) Average closing price – last 20 trading days: £37.01 Average closing price – 2024: £36.50 |
