Oil risks testing contract lows at $88.09

Daily Market Analysis (SHORT TERM) Monday 10/22/12


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (December):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 10/15/12 @ 112.92. Confirmation of a top with a close violation on 10/18/12 @ 112.42. Downside Targets = 110.86 – 109.36.
  • New lows made on current move Friday @ 109.90. STR3MO = 108.20.
  • December Brent Crude sank lower again on Friday, cracking through $110 briefly and closing at its lowest price in more than two weeks.
  • Look for a lower opening on Monday as news of Iranian-US nuclear negotiations may dilute some of the fear premium that has been priced into this market as Brent may once again challenge the Short Term support zone of $106.50 – $107.18.
  • Projected Daily Range: 2.31
  • Projected Weekly Range: 5.35
  • Projected Monthly Range: 12.02

WTI Crude Oil (December):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 10/17/12 @ 92.80. Confirmation of a bottom with a close violation on 10/09/12 @ 92.39. Upside Targets = 94.91 – 95.83.
  • Bearish EROVB (Extended Range Outside Vertical Bar) generated on Friday.
  • December WTI Crude Oil started Friday off with a bang, making new highs for the week before looming concerns over lower global growth expectations crept back into the market.
  • WTI should be able to find some initial support just below $90 on Monday but if it is unable to sustain a rally to help the market close above $91.73, look for WTI to fall back lower to retest the contract lows at $88.09.
  • Projected Daily Range: 2.15
  • Projected Weekly Range: 4.93
  • Projected Monthly Range: 11.33

Natural Gas (November):

  • Short Term Trend is bullish.
  • Confirmation of a bottom with a range violation on 10/19/2012 @ 3.592. Confirmation of a bottom with a close violation on 10/19/2012 @ 3.617. Upside Targets = 3.629 – 3.747.
  • November Natural Gas moved to new 2012 highs on Friday at $3.647 as the market tried to follow through on Thursday’s bullish extension but failed to deliver a strong close, settling just above the day’s mid-range.
  • Look for our maximum Intermediate term upside objective of $3.747 to keep a lid on the market as it continues to struggle to find strength in the resistance zone of $3.602 - $3.747.
  • Projected Daily Range: .127
  • Projected Weekly Range: .260
  • Projected Monthly Range: .624

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