Friday’s close triggered our buy signal in the CME’s RBOB gasoline futures by closing twice consecutively higher and twice consecutively above previous day highs. But that’s not the only reason we like gasoline. Summer driving season is just beginning. With airfares through the roof and this year’s weird weather threatening major disruptions in air traffic, we expect more vacationers to take to the road. June and July are typically very friendly months for gasoline. And while gasoline does not rally every summer, we believe it will stick to the script this time.

Gasoline may not be cheap in dollars (ask any SUV owner!) but it is cheap in relation to the price of crude oil. That means refiners are not making as much money as they may have in previous years because increases in the price of gasoline have not kept pace with the price of crude. Consequently, it would not surprise us to see notifications popping up announcing “maintenance” or “repair” work at key refineries over the next 5 weeks or so. What refineries go off line prices at the pump go up and refiners get a built in excuse to raise them.

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A friendly seasonal environment and potential refiner manipulation can’t hurt, but the thing we like most about this market right now is its chart setup. This market is giving us a readily identifiable risk point backed by three bullish signals. We can add a key moving average crossover and a crossover in our overbought / oversold indicator to the two consecutively higher closes we already mentioned.

Our suggested trade is designed to pay off should August gasoline futures rise above $2.90 per gallon – a move of just 2.5 cents or .086 percent from current levels. Maximum gain will be achieved if gasoline is above $2.90 per gallon on option expiration day, July 26 which is a little more than a month from now. Gasoline does not need to move much in order for this trade to be successful but is does need to move and hold above $2.90. We believe this is a very reasonable expectation.