Natural gas plunges on storage withdrawals

Daily Market Analysis (SHORT TERM) Friday 02/08/2013

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.
  • VRCB generated on Thursday making new highs on current move @ 117.83.
  • March Brent Crude narrowly avoided breaking through the spot highs at $117.95 made last September on Thursday as it traded within a tight range and could not sustain the momentum throughout most of the day until after the pit-session closed.
  • Look for Brent to make new highs for the week on Friday and trade to the weekly upside objective of $118.27.
  • Projected Daily Range: 1.56
  • 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.
  • March WTI Crude Oil was also unable to sustain an early pop higher as it dropped to close in the lower 20% of the daily trading range and below $95 for the first time in nearly two weeks.
  • WTI’s inability to make a significant push lower throughout the session points the direction of Friday’s trading higher as the market looks to resume its bull run and close the spread between itself and Brent.
  • Projected Daily Range: 1.59
  • 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.
  • Bearish ERVB generated on Thursday.
  • March Natural Gas dropped sharply lower on Thursday as storage withdrawals badly missed expectations and the market approached the lows of the week going into the close.
  • Expect for a mild short-covering rally to unfold on Friday before continued bearish momentum drops the market through to possibly four-week lows.
  • Projected Daily Range: .114
  • 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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