Energy market analysis
By Ralph D. Preston III, Heritage West Financial Inc.
Dec. 11, 2006 — As we head into the last three weeks of trading in 2006, across the entire energy complex, prices have moved very little compared with where they started this year.
Supplies are up and the market is in a tug of war determining what demand holds in store. The Strategic Petroleum Reserve is filled to the brim, and the Department of Energy reported the week ending Dec. 1 that U.S. crude oil inventories were 14% higher than the five-year average.
January crude oil
A close above $63.85 per barrel resistance should embolden the bulls and target $65.00 plus. A close below $61.14 alerts for a test of key support at $60.12.
January heating oil
The market formed a 1-2-3 trend-reversing pattern and closed above the #2 point (1.8070) on Nov. 29, which could have triggered a buy signal. Keep your stops. A dip below 1.6870 nullifies the formation.
January unleaded gas
The market has formed a 1-2-3 trend-reversing pattern and closed above the #2 point on Nov. 21, which could have triggered a trade. Keep your stops. A close above 171 positions the market for further advances. A close below 16246 cautions for pressured dips to 16000 support.
January natural gas
The market is bearish and poised for further declines. A close below 7438 could initiate another leg down targeting 7150. A close over 8076 is needed to halt bear forces and send recovery trade to attack 8297. Trade that is contained under 8076 should fall back into bear trade.
Ralph D. Preston IIIHeritage West Financial, Inc.Phone: 858-560-2646(800) 263-3004(858) 560-0704 faxrpreston@heritagewestfutures.comwww.heritagewestfutures.com
Past performance is not necessarily indicative of futures results. The risk of loss is present in trading futures and options.
