By Catherine Airlie
Sept. 24 (Bloomberg) -- European Union carbon permits are poised to advance as so-called stochastic indicators cross, according to Orbeo.
The slow stochastic oscillators ``will probably cross over today and provide a buying signal to the market,'' Carine Hemery, a Paris-based analyst at Orbeo, a carbon venture between Societe Generale SA and Rhodia SA, said by telephone today.
The oscillator measures the closing price of a security relative to its highs and lows during a particular period to try to predict whether it will rise or fall. The chart signals prices may increase when its ``k-line,'' based on a formula that uses the highest and lowest prices in a set period, climbs above its own moving average, or ``d-line.'' Carbon's 10-day k-line may climb above the three-day d-line, Hemery said.
EU permits for December rose 17 cents, or 1.1 percent, to 15.06 euros ($20.17) a metric ton as of 10:41 a.m. on London's European Climate Exchange. Permits hit a one-month low of 14.76 euros on Sept 21.
In technical analysis, investors study charts of trading patterns to predict changes in prices. Traders also gauge permit prices by looking at fuel prices. The U.K. and Germany have a mixture of coal and natural gas-fueled power plants and can switch between the two depending on costs.
Natural gas for delivery in Britain next month gained 1.6 percent to 44.65 pence a therm, according to broker data on Bloomberg. The contract has risen 5.9 percent so far this week. Higher gas prices may encourage more power generation from coal plants, which require almost double the number of permits as natural gas plants.
For Related News and Information:
For a Stochastic Chart on EU Carbon: {MOZ0 <CMDTY> TAS <GO>}
Stories on technical analysis: {NI TA BN <GO>}
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--Editors: Rob Verdonck, Mike Anderson.
To contact the reporter on this story:
Catherine Airlie in London at +44-20-7073-3308 or
cairlie@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
