Oil weighted by supply builds, waiting on Bernanke

Daily Market Analysis (SHORT TERM) Thursday 08/30/12


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (October):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 08/27/12 @ 112.99. Confirmation of a top with a close violation on 08/27/12 @ 112.26. Downside Target = 107.40 – 106.24.
  • VRCB-OVB combo generated on Wednesday making new lows on the current move @ 111.50.
  • October Brent Crude did indeed break lower in overnight trading on Wednesday but rallied higher throughout morning trading in what eventually turned out to be a very choppy trading session.
  • Based on Wednesday’s price action, Brent may see a modest start to the session but if this market fails above $113, look for a sharp decline to possibly below $110.
  • Projected Daily Range: 2.38
  • Projected Weekly Range: 4.32
  • Projected Monthly Range: 13.99

WTI Crude Oil (October):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 08/27/12 @ 95.40. Confirmation of a bottom with a close violation on 08/15/12 @ 94.33. Downside Targets = 89.82 – 88.74.
  • Possible confirmation of a top with a close @ 95.40 or lower.
  • October WTI Crude dropped significantly lower during Wednesday trading as large supply builds sent the market back below $95, although it was able to settle just below the daily mid-range.
  • WTI’s bearish price action suggest that this market should continue lower on Thursday heading into the weekend towards the initial downside projected target of $92.62.
  • Projected Daily Range: 2.11
  • Projected Weekly Range: 3.76
  • Projected Monthly Range: 11.71

Natural Gas (October):

  • Short Term Trend is bearish.
  • Confirmation of a top with a range violation on 08/27/2012 @ 2.721. Confirmation of a top with a close violation on 08/02/2012 @ 2.979. Downside Targets = 2.612 – 2.563.
  • Bullish OVB generated on Wednesday after making new lows on the current move @ 2.610. Downside Targets 100% achieved.
  • October Natural Gas traded just two ticks through the $2.612 monthly downside objective listed since early August on Wednesday before riding a huge rally to its highest close of the week.
  • Look for natural gas to continue higher in early trading Thursday before the EIA storage report as high as $2.725.
  • Projected Daily Range: .096
  • Projected Weekly Range: .239
  • Projected Monthly Range: .629

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