Oil faces bearish technicals, looking at $80

Daily Market Analysis (SHORT TERM) Friday 08/03/12


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (September):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 07/27/12 @ 106.19. Confirmation of a bottom with a close violation on 07/27/12 @ 106.47. Upside Target = 109.88 – 111.83.
  • New highs made on current move Thursday @ 107.30.
  • September Brent Crude finished Thursday’s session virtually unchanged after a lack of action from the ECB brought the broad risk markets off their highs.
  • Although the Middle East relations are continuing to intensify, the biggest factor left in the crude oil market is Friday’s NFP report which, based on previous economic indicators, could prompt a sharp drop in prices.
  • Projected Daily Range: 2.54
  • Projected Weekly Range: 5.90
  • Projected Monthly Range: 13.99

WTI Crude Oil (September):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 08/02/12 @ 87.30. Confirmation of a top with a close violation on 07/23/12 @ 88.14. Downside Targets = 85.86 – 84.62.
  • September WTI Crude sank sharply lower on Thursday as it generated a bearish OVB after trading to within eight ticks of the previous week’s low.
  • Should WTI follow through on Thursday’s bearish price action, this market could generate new three week lows and possibly head back lower toward the $80 threshold.
  • Projected Daily Range: 2.55
  • Projected Weekly Range: 5.20
  • Projected Monthly Range: 11.71

Natural Gas (September):

  • Short Term Trend is bearish.
  • Confirmation of a top with a range violation on 08/02/2012 @ 3.122. Confirmation of a top with a close violation @ 2.979. Downside Targets = 2.871 – 2.790.
  • Confirmation of a top with a range violation @ 3.122. Confirmation of a top with a close violation @ 2.979.
  • September Natural Gas lost nearly 8% on Thursday as a much larger than expected build was reported by the EIA as prices traded to within 5 ticks of the downside objective listed in Thursday morning’s report.
  • The current overwhelmingly bearish price action suggests that this market could break even further to 2.612 over the next week and a half.
  • Projected Daily Range: .166
  • Projected Weekly Range: .265
  • Projected Monthly Range: .586

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