Oil risks setback without making new highs

Daily Market Analysis (SHORT TERM) Thursday 01/17/2013


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (March ‘13):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 01/11/13 @ 109.13. Confirmation of a bottom with a close violation on 12/12/12 @ 107.17. Upside Targets = 110.67 – 111.37
  • March Brent Crude traded to within five ticks of the projected upside target mentioned in Tuesday evening’s report before dropping to make new lows for the week.
  • If Brent closes below $108.90 during the rest of the week it will confirm a ST top in the market and set up a decline back down near the $105-$106 level next week.
  • Projected Daily Range: 1.58
  • 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 01/08/13 @ 93.36. Confirmation of a bottom with a close violation on 12/18/12 @ 88.40. Upside Targets = 96.36 – 97.57.
  • February WTI Crude Oil once again outpaced Brent on Wednesday as it generated its highest close in five months but was unable to break through to new highs on the week.
  • After a 1 million barrel draw in crude supplies, WTI exhibited strong bullish price action but the inability to make new highs on the week could lead to a setback in prices on Thursday as WTI remains in a restricted trading range.
  • Projected Daily Range: 1.27
  • Projected Weekly Range: 3.15
  • Projected Monthly Range: 7.18

Natural Gas (February ‘13):

  • Short Term trend is bearish.
  • Confirmation of a bottom with a range violation on 01/14/2013 @ 3.359. Confirmation of a bottom with a close violation on 01/14/2013 @ 3.373. Upside Targets = 3.583 – 3.628.
  • Inside compression day generated on Wednesday.
  • February Natural Gas backed off in mid-day trading on Wednesday near the current weekly mid-range before staging a solid rally into the end of the session to close in the upper 80% of the trading range.
  • Feb natural gas still has an 86% probability of taking out Tuesday’s high before its low but will most likely face strong resistance near $3.50 ahead of Thursday’s storage number.
  • Projected Daily Range: .101
  • Projected Weekly Range: .286
  • Projected Monthly Range: .492
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