Natural gas looks for increased volatility ahead of storage report

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 bottom with a range violation on 01/15/13 @ 111.23. Confirmation of a bottom with a close violation on 12/12/12 @ 107.17. Upside Targets = 117.89 – 121.21.
• Inside compression day generated on Wednesday.
• March Brent Crude made a push higher after an overnight drop pushed the market back below $116 again before rallying to close just 3 cents lower from last week’s settle.
• There is still an 86% probability of breaking through to new weekly highs where the market should push through $118 and its longstanding upside objective of $121.21.
• Projected Daily Range: 1.63
• Projected Weekly Range: 3.26
• Projected Monthly Range: 6.75

WTI Crude Oil (March ‘13):

• Short Term Trends are bullish.
• Confirmation of a top with a range violation on 02/01/13 @ 96.83. Confirmation of a top with a close violation on 02/04/13 @ 96.17. Downside Targets = 94.84 – 93.99.
• New lows made on current move Wednesday @ 95.04.
• March WTI Crude Oil dropped sharply overnight before a less than expected inventory build pushed the market back to new highs in the second half of trading to close virtually unchanged.
• This kind of price action is usually indicative of a ST bottom having formed and should lead to a renewed push higher that will take the market above $100/barrel.
• Projected Daily Range: 1.66
• Projected Weekly Range: 2.61
• Projected Monthly Range: 6.42

Natural Gas (March ‘13):

• Short Term trend is bullish.
• Confirmation of a bottom with a range violation on 01/31/13 @ 3.345. Confirmation of a bottom with a close violation on 02/05/13 @ 3.399. Upside Targets = 3.535 – 3.554.
• VRCB generated on Wednesday making new highs on current move @ 3.459.
• March Natural Gas traded within a very narrow band on Wednesday ahead of the EIA storage report and conflicting worries in the near term over a possible cold weather spell in the Midwest and a low storage pull.
• The weekly close gap has still not quite been filled at $3.463 and expect increased volatility tomorrow around the report and significant momentum failures as the market nears $3.50.
• Projected Daily Range: .102
• Projected Weekly Range: .250
• Projected Monthly Range: .492