Natural gas finds support as traders await inventories

Daily Market Analysis (SHORT TERM) Thursday 12/27/2012


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
  • Bullish Extended Range day generated on Wednesday.
  • February Brent Crude moved to new highs for the month on Wednesday and to its highest level since mid-October despite a volatile trading session in other risk markets due to increasing uncertainty over the fiscal cliff.
  • Look for the price action to continue to drive this market higher into Thursday as it tracks down the extended upside objective of $113.61.
  • Projected Daily Range: 1.74
  • 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.
  • New highs made on current move Wednesday @ 91.30.
  • February WTI crude oil led the crude sector higher throughout most of the trading session on Wednesday as it also moved to new highs for the month and closed above $90 for the first time since mid-October.
  • Now that WTI has traded through the daily RBB, look for a slight move higher on Thursday and some sideways trading action heading into the weekend.
  • 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 top with a range violation on 12/26/2012 @ 3.362. Confirmation of a bottom with a close violation on 12/18/2012 @ 3.418. Upside Targets = 3.549 – 3.631.
  • February Natural Gas once again found solid support above $3.32 on Wednesday in a very light volume trading session as heavy snow throughout the Midwest and Northeast have traders preparing for a large supply draw in the weeks to come.
  • While Friday’s storage number may not be overwhelmingly bullish, natural gas is currently trading at a significant discount and has found support at the current levels that warrants a move back to the upside to fill the close gap left in the market at $3.57.
  • Projected Daily Range: .107
  • Projected Weekly Range: .282
  • Projected Monthly Range: .557

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