Oil decline should continue, targeting $82.80

Daily Market Analysis (SHORT TERM) Thursday 05/31/12


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

BRNN12:

  • Short Term Trends are bearish.
  • Confirmation of a top with a range violation on 05/30/12 @ 106.05. Confirmation of a top with a close violation on 05/02/12 @ 118.20. Downside Targets = 108.44 – 102.29 – 98.59.
  • July Brent Crude followed through on last night’s report again Wednesday as it dropped sharply lower and closed in on our weekly downside objective of 102.29.
  • If Brent is unable to find a bottom near 102.29 this market could crack the $100 threshold and trade lower toward 96.70.
  • Projected Daily Range: 2.36
  • Projected Weekly Range: 5.94
  • Projected Monthly Range: 10.41

CLN12:

  • Short Term Trends are bearish.
  • Confirmation of a top with a range violation on 05/30/12 @ 89.27. Confirmation of a top with a close violation on 05/03/12 @ 102.54. Downside Target = 100.44 – 93.98 – 89.97 – 84.37
  • July WTI Crude saw its largest decline in more than three week on Wednesday as it traded through the Intermediate Term downside objective of 87.98 listed in yesterday morning’s report.
  • WTI should continue even lower over the next few weeks to $82.80 where it will run into the major-term support level.
  • Projected Daily Range: 2.24
  • Projected Weekly Range: 5.63
  • Projected Monthly Range: 9.25

NGN12:

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 05/25/12 @ 2.651. Confirmation of a top with a close violation on 05/25/12 @ 2.627. Downside Targets = 2.492 – 2.307.
  • VRCB generated on Wednesday making new lows on current move @ 2.393. Downside Target  over 80% achieved.
  • July Nat Gas fell lower again on Wednesday as it traded just through our second downside objective before rallying in the second half of the pit session to last trade near the day’s mid-range.
  • Look for natural gas to see a possible one or two day bounce up near $2.60 – $2.65 before turning back lower to retest the contract lows. However, yesterday’s VRCB could have been a slow down bar with continued acceleration to retest the lows.
  • Projected Daily Range: .135
  • Projected Weekly Range: .289
  • Projected Monthly Range: .460

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