Natural gas ready for drop to $2.612

Daily Market Analysis (SHORT TERM) Thursday 08/09/12


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.
  • September Brent Crude continued its rise higher on Thursday after trading to within $0.29 of our Q3 upside target of $113.56 and closed above the Resistance Bollinger Band for the second straight day.
  • With the jobless claims number due our early Thursday morning, look for the results to drive the market direction.
  • Projected Daily Range: 2.57
  • Projected Weekly Range: 5.69
  • Projected Monthly Range: 13.99

WTI Crude Oil (September):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 08/03/12 @ 90.96. Confirmation of a bottom with a close violation on 08/03/12 @ 91.40. Upside Targets = 95.27 – 96.95.
  • September WTI Crude lost ground for the first time this week on Wednesday as it was unable to hold on to the early gains it generated after a larger than expected supply draw.
  • Crude’s price action on Wednesday suggests that this market could be nearing a Short Term top and if WTI closes below Wednesday’s low of 92.82 the market should trade down to 89.63.
  • Projected Daily Range: 2.08
  • Projected Weekly Range: 5.49
  • 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.
  • Double VRCB combination generated on Wednesday.
  • September Natural Gas dropped lower on Wednesday ahead of Thursday’s EIA storage number with higher estimates for builds than over the previous few weeks.
  • Should the storage projection estimates hold up, natural gas will drop sharply lower to coincide with last week’s bearish price action and volatility and move lower toward our monthly downside target of $2.612.
  • Projected Daily Range: .113
  • Projected Weekly Range: .343
  • Projected Monthly Range: .629

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