Oil looks to form seasonal lows

Daily Market Analysis (SHORT TERM) Friday 11/09/12


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 11/06/12 @ 110.27. Confirmation of a bottom with a close violation on 11/06/12 @ 110.27. Upside Targets = 112.48 – 114.73.
  • Possible confirmation of a top with a range violation @ 106.11. Possible confirmation of a top with a close @ 106.11 or lower.
  • December Brent Crude generated mostly non-directional price movements throughout the session after moving back above $108 before closing just above the daily mid-range.
  • Look for a move back lower on Friday and the market sells off into the weekend in another risk-off session.
  • Projected Daily Range: 2.63
  • Projected Weekly Range: 4.63
  • Projected Monthly Range: 10.65

WTI Crude Oil (December):

  • Short Term Trends are bearish.
  • Confirmation of a top with a range violation on 11/07/12 @ 84.33. Confirmation of a top with a close violation on 11/07/12 @ 84.33. Downside Targets = 81.36 – 78.69.
  • Inside compression day generated on Thursday.
  • December WTI Crude Oil moved minimally higher on Thursday in a subdued trading range as the recent increase in volatility proved unsustainable as the market closed just above the $85 mark.
  • Look for WTI to make a move slightly higher on Friday before retesting the current low as the market looks to make its seasonal low soon.
  • Projected Daily Range: 2.15
  • Projected Weekly Range: 4.26
  • Projected Monthly Range: 10.61

Natural Gas (December):

  • Short Term trend is bearish.
  • Confirmation of a top with a range violation on 10/25/12 @ 3.751. Confirmation of a top with a close violation on 10/26/12 @ 3.724. Downside Targets = 3.501 – 3.476.
  • December Natural Gas was very erratic in Thursday trading as a smaller than expected supply injection had the market running from its lows in early trading as it bounced off the daily SBB but lost steam late in the session as the $3.60 seemed once again to be unsustainable.
  • Currently natural gas is on track to generate a VRCB week unless the market experiences a large increase in volatility heading into the weekend.
  • Note: While today’s price action was mostly bullish, the current four-day formation has less of a bottoming structure to it than usual and the lows could be suspect to a breach.
  • Projected Daily Range: .113
  • Projected Weekly Range: .314
  • Projected Monthly Range: .624

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