Oil target of $86.44 looking vulnerable

Daily Market Analysis (SHORT TERM) Wednesday 09/26/12


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (November):

  • Short Term Trends are bearish.
  • Confirmation of a top with a range violation on 09/17/12 @ 111.99. Confirmation of a top with a close violation on 09/19/12 @ 111.10. Downside Targets = 107.18 – 106.50.
  • Inside compression day generated on Tuesday. Possible confirmation of a bottom with a range violation @ $111.71. Possible confirmation of a bottom with a close @ $111.71 or higher.
  • November Brent Crude spent most of the early session trending higher before losing its gains and last trading below the day’s mid-range.
  • Although Brent could not break through last Friday’s high of $111.70, it did increase the spread between itself and WTI which should be a continuing theme throughout the week as Brent remains steady to modestly lower.
  • Projected Daily Range: 2.14
  • Projected Weekly Range: 6.09
  • Projected Monthly Range: 13.05

WTI Crude Oil (November):

  • Short Term Trends are bearish.
  • Confirmation of a top with a range violation on 09/19/12 @ 94.97. Confirmation of a top with a close violation on 09/19/12 @ 94.27. Downside Targets = 89.28 – 86.44.
  • November WTI Crude Oil dropped back near the month’s low on Tuesday as WTI closed at its lowest level since Aug. 2 and generated new lows for the day after the close of the pit session on the heels of a late day “risk-off” sentiment.
  • WTI’s price action suggests a drop back below $90 to the first downside target of $89.22 with the secondary target of $86.44 looking evermore vulnerable.
  • Projected Daily Range: 1.83
  • Projected Weekly Range: 5.76
  • Projected Monthly Range: 10.76

Natural Gas (November):

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 09/24/12 @ 3.080. Confirmation of a bottom with a close violation on 09/25/12 @ 3.105. Upside Targets = 3.211 – 3.283.
  • Confirmation of a bottom with a close violation @ 3.105.
  • November Natural Gas moved substantially higher on Tuesday during the last half-hour of pit session trading as natural gas followed through on Monday evening’s call to challenge last week’s high of $3.121 in Tuesday’s trading action.
  • After last week’s DOUBLE VRCB pattern in a clearly defined support zone, natural gas has begun what could be an extensive move higher that challenges not only 2012 highs of 3.277 but the November contract highs of 3.407.
  • Projected Daily Range: .095
  • Projected Weekly Range: .297
  • Projected Monthly Range: .665

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