Natural gas setting up for bear run to $2.82

KMH Capital Weekly Market Analysis

Natural Gas (March ‘13)

WEEKLY OUTLOOK:
Intermediate Term Trend is bullish.
Current Downside Targets = $3.652 – $3.750
Projected Weekly Range: $0.222
Projected Monthly Range: $0.515

  • Natural Gas dropped lower for the second straight week as the largest storage injection of the season was unable to help propel the market back through $3.40 in the second half of the week and left a bearish weekly close gap in the market at $3.463. If/when last week’s low is broken, it will partially confirm an IT TREND REVERSAL back to bearish and set up the possibility for this market to trade back below $3 and to an extended IT objective of $2.823. WTI Crude Oil: (March ‘13)

WEEKLY OUTLOOK:
Intermediate Term Trends are bullish.
Current Upside Targets = $92.52 – $97.24 – $103.88
Projected Weekly Range: $3.21
Projected Monthly Range: $7.18

  • WTI traded all to the upside during this past week as it traded and closed outside the weekly RBB for the first time since the 2012 highs were made in late February. The oil markets still have plenty of room left to the upside and while WTI specifically is starting to show some slight indicators that it may be overbought into some short-term resistance; expect for the 78% probability of trading through the spot September highs at $100.42 mentioned in this year’s first report to unfold before there is a close below the low of a high week.

Brent Crude: (March ‘13)

WEEKLY OUTLOOK:
Intermediate Term Trends are bullish.
Current Upside Targets = $115.89 - $121.21                 
Projected Weekly Range: $3.63
Projected Monthly Range: $7.44

  • Brent saw the volatility pop higher as projected in last week’s report as it too moved through the weekly RBB to generate its highest weekly close since April 2012 before stopping just shy of spot September highs at $117.95. As is much the same case with WTI, Brent is beginning to look overbought on the short term as it has moved higher for three straight weeks and could see a mild profit-taking selloff back below last week’s mid-range before another round of buying comes into the market and takes it up towards the major-term objective first mentioned in last week’s report of $125.33.

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