Natural gas fall opens gates to sub-$3 gas

Daily Market Analysis (SHORT TERM) Tuesday 02/12/2013

KEY TERMS

OVB      Outside Vertical Bar
VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (April ‘13):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 01/15/13 @ 110.39. Confirmation of a bottom with a close violation on 12/12/12 @ 106.48. Upside Targets = 117.89 – 121.21.
  • Inside compression day generated on Monday.
    • April Brent Crude dropped back lower on Monday in early trading before finding support as U.S. traders came online to help push the market back up near the day’s mid-range.
    • Look for Monday’s weakness to be short-lived as the market continues to work its way back higher and extend the gains above $120.
  • Projected Daily Range: 1.47
  • Projected Weekly Range: 3.71
  • 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.
  • Bullish OVB generated on Monday after making new lows on the current move @ 94.97. Downside Target 97% achieved.
    • March WTI Crude Oil reversed course from its early session declines to close just off the session’s high and above the 10-day moving average.
    • Based on Monday’s bullish price action, look for an extension of the projected weekly trading range to take the market back up through last week’s highs and toward new contract highs above $100.
  • Projected Daily Range: 1.70
  • Projected Weekly Range: 2.49
  • Projected Monthly Range: 6.42

Natural Gas (March ‘13):

  • Short Term trend is bearish.
  • Confirmation of a top with a range violation on 02/08/13 @ 3.281. Confirmation of a top with a close violation on 02/08/13 @ 3.272. Downside Targets = 3.189 – 3.109.
    • March Natural Gas fell through the previous four weeks’ lows on Monday before finding support on the exact tick of the daily SBB to rally and close just off the session’s high.
    • Traders should look to sell any ensuing rally hard as an IT TREND REVERSAL to bearish has been partially confirmed with a range violation and should natty settle this week below $3.232, will open the gates to sub-$3 gas nearing the $2.823 mark.
  • Projected Daily Range: .110
  • Projected Weekly Range: .206
  • 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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