Natural gas could test August lows by yearend

Daily Market Analysis (SHORT TERM) Monday 12/24/2012


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (February ‘13):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 12/12/12 @ 107.53. Confirmation of a bottom with a close violation on 12/12/12 @ 108.02. Upside Targets = 110.67 – 111.37
  • Close < Low of High Day generated on Friday.
  • February Brent Crude dropped back near the weekly mid-range on Friday as a fiscal cliff agreement seemed to sputter along with the cancelation of a vote on “Plan B”.
  • Look for Brent to move slightly lower in a thin trading session on Monday down to $108 before finishing the session back unchanged.
  • Projected Daily Range: 1.48
  • Projected Weekly Range: 4.30
  • Projected Monthly Range: 9.03

WTI Crude Oil (February ‘13):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 12/18/12 @ 88.21. Confirmation of a bottom with a close violation on 12/18/12 @ 88.40. Upside Targets = 90.10 – 90.68.
  • Close < Low of High Day generated on Friday.
  • February WTI Crude Oil followed through on last Thursday evening report to the letter, dropping over half of its gains of the week and trading just four ticks through the $88 mark.
  • Like Brent, WTI should trade marginally lower to begin the week in light volume and settle just above the $88 mark where ST support is pegged.
  • Projected Daily Range: 1.82
  • Projected Weekly Range: 3.73
  • Projected Monthly Range: 8.74

Natural Gas (February ‘13):

  • Short Term trend is bearish.
  • Confirmation of a bottom with a range violation on 12/18/2012 @ 3.396. Confirmation of a bottom with a close violation on 12/18/2012 @ 3.418. Upside Targets = 3.549 – 3.631.
  • New highs made on the current move Friday @ 3.532.
  • February Natural Gas was  unable to build on Thursday’s bullish storage number during Friday’ session as all attempts to break-out above $3.50 stalled and the market eventually settled back in the lower 40% of the day’s trading range.
  • While natural gas got to within just 4 cents of filling the weekly close gap left in this market from two weeks ago, bears still have firm control of this market and with a weaker than normal storage number expected during the holiday week, natural gas could drop all the way down to test the August lows at $3.222 by years end.
  • Projected Daily Range: .128
  • Projected Weekly Range: .282
  • Projected Monthly Range: .557

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