Natural gas targets $4 as first storage withdrawal looms

Daily Market Analysis (SHORT TERM) Wednesday 11/14/2012


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (January ‘13):

  • 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.
  • VRCB generated on Tuesday.
  • January Brent Crude did in fact move back lower on Tuesday as projected but was able to find the crucial support needed to hold the market up from another collapse lower as the $106 price remains a line in the sand for many traders.
  • Although volatility has remained low this week, look for an increase in price action on Wednesday and the market to make a move back near this week’s high.
  • Projected Daily Range: 2.21
  • Projected Weekly Range: 5.27
  • 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.
  • December WTI Crude Oil settled modestly lower on Tuesday despite closing above its daily mid-range as it traded a mere 8 ticks below the support price listed in Tuesday mornings report before moving back higher in late session trading.
  • Look for WTI to move to the upside on Wednesday and challenge the Monday highs of $86.54 initially before it makes a move to a possible weekly upside target in late week trading.
  • Projected Daily Range: 1.76
  • Projected Weekly Range: 4.75
  • 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.
  • Bullish ERVB (Extended Range Vertical Bar) generated on Tuesday.
  • December Natural Gas exploded higher on Tuesday to its highest level in nearly two weeks and its largest single day gain in nearly five months as cooler temperatures across the country point to the season’s possible first storage withdrawal.
  • Traders should look for a pullback to $3.62–$3.65 to re-enter into long positions as the market should take aim for $4.
  • Projected Daily Range: .136
  • Projected Weekly Range: .297
  • Projected Monthly Range: .624

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