Natural gas looks for increased volatility ahead of storage report

Daily Market Analysis (SHORT TERM) Thursday 02/07/2013

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 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
About the Author
Kris Hicks

KMH is a trading and technical analysis firm that specializes in commodity futures and commodity based ETF’s. Kris Hicks has worked for numerous years in the commodity business and in 2011 accurately forecasted both $25 moves to the downside in May and July and the $25+ move to the upside in October in oil. He also called the all-time high day for gold on Sept. 6, 2011 and forecasted a projected downside target of 1528.10 in March 2012. He was also responsible for projecting the Q2 and Q4 low in the Euro FX to within 13 and 9 ticks, respectively. His trading methodology has a high degree of accuracy which confirms tops/bottoms, projected trading ranges and projected targets for those ranges. His expertise is focused on 16 commodities plus the comparable ETF markets. You can reach Kris at Kris@KMH-Capital.com or visit his website at www.KMH-Capital.com.

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