Natural gas could see quick drop on profit-taking

Daily Market Analysis (SHORT TERM) Monday 10/15/12


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (December):

  • Short Term Trends are bearish.
  • Confirmation of a bottom with a range violation on 10/05/12 @ 112.70. Confirmation of a bottom with a close violation on 10/09/12 @ 113.41. Upside Targets = 117.15 – 117.88.
  • December Brent Crude Oil dropped lower on Friday as a round of profit taking hit the market after once again stalling just below $115.
  • Expect Brent to trade lower initially on Monday before rallying back above $114 where it will have to overcome a critical juncture at $114.45 to continue higher near the contract high.
  • Projected Daily Range: 2.32
  • Projected Weekly Range: 5.34
  • Projected Monthly Range: 12.02

WTI Crude Oil (November):

  • Short Term Trends are bearish.
  • Confirmation of a bottom with a range violation on 10/09/12 @ 91.85. Confirmation of a bottom with a close violation on 10/09/12 @ 92.39. Upside Targets = 94.56 – 95.72.
  • Inside VRCB generated on Thursday. Possible confirmation of a top with a range violation @ 91.01. Possible confirmation of a top with a close violation @ 91.01 or lower.
  • November WTI Crude Oil dropped a shade lower on Friday in a very thin trading range as the market failed to log a sustainable rally throughout the session and settled just below the day’s mid-range.
  • Look for WTI to drop lower on Monday in early trading as this move higher should now go back to retest the $90 threshold to try and find support.
  • Projected Daily Range: 1.99
  • Projected Weekly Range: 5.11
  • Projected Monthly Range: 11.33

Natural Gas (November):

  • Short Term Trend is bullish.
  • Confirmation of a bottom with a range violation on 10/11/12 @ 3.516. Confirmation of a bottom with a close violation on 09/25/12 @ 3.105. Upside Targets = 3.602 – 3.747.
  • VRCB generated on Friday making new highs on current move @ 3.638.
  • November Natural Gas generated new 2012 highs on Friday as it struggled to continue on the bullish momentum from Thursday bullish storage report, only managing to settle up seven ticks on the day.
  • Natural gas has now spent the past two sessions trading within the lower range of IT resistance zone and a drop below Friday’s low could signal a profit taking sell-off that could drop this market from its oversold stature down at least $0.20 cents and possibly more as the overall fundamentals remain slightly bearish.
  • Projected Daily Range: .108
  • Projected Weekly Range: .349
  • Projected Monthly Range: .624

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