Oil pullback expected after hitting three month high

Daily Market Analysis (SHORT TERM) Friday 08/17/12


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (October):

  • 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 = 114.37 – 118.06.
  • October Brent Crude closed above $115 for the first time early May on Thursday as turmoil in the Middle East continues to brew causing fears of supply shortages and pushing the market steadily higher.
  • With prices dropping significantly lower in the last few hours of trading on Thursday, Friday’s price action should move a shade lower with some profit taking heading into the weekend.
  • Projected Daily Range: 2.03
  • Projected Weekly Range: 5.18
  • Projected Monthly Range: 13.99

WTI Crude Oil (September):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 08/15/12 @ 94.15. Confirmation of a bottom with a close violation on 08/15/12 @ 94.33. Upside Targets = 98.20 – 101.26.
  • September WTI Crude traded through our initial upside quarterly objective of $95.53 on Thursday as it traded to its highest level in three months before hitting resistance at the daily Resistance Bollinger Band.
  • Look for WTI to contract a bit on Friday after three straight days of gains amid an expected very thin trading session.
  • Projected Daily Range: 1.80
  • Projected Weekly Range: 4.57
  • 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 – 2.612**.
  • Bearish OVB generated on Thursday making new lows on the current move @ 2.685.
  • September Natural Gas saw a sharp bounce higher in initial trading after the storage report showed a slightly less than expected build in inventories before reversing course to make new lows for the month.
  • Having now made these new lows in the second half of the trading month, natural gas should follow through on Thursday’s bearish price action heading into the weekend and trade to the monthly objective of $2.612.
  • Projected Daily Range: .124
  • Projected Weekly Range: .338
  • Projected Monthly Range: .629

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