Natural gas falls as traders pessimistic about storage report

Daily Market Analysis (SHORT TERM) Tuesday 12/11/2012


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (January ‘13):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 12/05/12 @ 109.14. Confirmation of a top with a close violation on 12/05/12 @ 108.81. Downside Targets = 107.17 – 106.65.
  • February Brent Crude was unable to sustain its early gains on Monday, dropping to make new lows in the second half of trading and setting up for a continued fall through last week’s low.
  • While Brent is currently trading at prices that have offered previous support above $105, the current price action indicates that the market may drop below the $105 point to test the resilience of bulls before moving back near the $110 level this market has been stuck at for four months.
  • Projected Daily Range: 1.76
  • Projected Weekly Range: 4.73
  • Projected Monthly Range: 9.03

WTI Crude Oil (January ‘13):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 12/05/12 @ 87.56. Confirmation of a top with a close violation on 12/06/12 @ 86.26. Downside Targets = 85.59 – 85.16.
  • New lows made on current move Monday @ 85.33.
  • January WTI Crude Oil broke lower in afternoon trading on Monday to violate the lows of the previous three weeks before stopping just above $85 and closing off the day’s low.
  • The crude complex has been stuck in a very narrow trading range over the last six weeks and until this market can close outside of the $85-$90 bands it will be relegated to a trader’s market.
  • Projected Daily Range: 1.72
  • Projected Weekly Range: 4.38
  • Projected Monthly Range: 8.74

Natural Gas (January ‘13):

  • Short Term trend is bearish.
  • Confirmation of a top with a range violation on 11/28/2012 @ 3.840. Confirmation of a top with a close violation on 11/28/2012 @ 3.801. Downside Targets = 3.746 – 3.708.
  • New lows made on current move Monday @ 3.415.
  • January Natural Gas gapped lower on Monday and continued to remain under pressure throughout the day as traders expect a less than stellar storage report and gunned massive stops below $3.50.
  • The market will most likely remain under pressure until Thursday’s report and possibly consolidate losses to hover around $3.40 where the four month support price remains in this market.
  • Projected Daily Range: .128
  • Projected Weekly Range: .287
  • Projected Monthly Range: .557

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