Oil sees path higher to resistance at $97

Daily Market Analysis (SHORT TERM) Thursday 01/03/2013

 

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
  • New highs made on the current move Wednesday @ 112.90.
    • February Brent Crude gapped higher on Wednesday to trade to its highest levels since mid-October and close outside of the daily RBB for the first time since mid-November.
    • As long as Brent closes above $112.20 this week, this market should have a 78% chance of breaking through the September highs of 117.95 and moving onward towards my longstanding IT objective of 121.21.
  • Projected Daily Range: 1.71
  • Projected Weekly Range: 3.53
  • Projected Monthly Range: 7.54

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 the current move Wednesday @ 93.87.
    • February WTI Crude Oil exploded higher on Wednesday following the “deal” to avert the fiscal cliff tax increases as it spent most of the entire day’s session above the daily RBB before stopping just shy of breaking through $94.
    • While WTI settled considerable back off the day’s high toward the end of electronic trading, much of that can be attributed to profit taking after an $8 gain over the past three weeks and the market should continue higher before meeting any true resistance at $97.
  • Projected Daily Range: 1.82
  • Projected Weekly Range: 3.88
  • Projected Monthly Range: 7.18

Natural Gas (February ‘13):

  • Short Term trend is bearish.
  • Confirmation of a top with a range violation on 12/26/12 @ 3.362. Confirmation of a top with a close violation on 01/02/13 @ 3.315. Downside Targets = 3.102 – 3.055.
  • Bearish ERVB generated on Wednesday.
    • February Natural Gas was able to come back marginally off the pit session lows as it headed into the close on Wednesday yet still closed below the daily SBB as it shed nearly 12 cents.
    • Natural Gas should build on Wednesday’s late momentum as it nears Friday’s storage report that is expected to deliver its largest draw in supplies of the season.
  • Projected Daily Range: .115
  • Projected Weekly Range: .274
  • Projected Monthly Range: .492

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