Oil unable to sustain highs, risks correction

Daily Market Analysis for Thursday 02/14/2013

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.
  • 2nd Consecutive VRCB generated on Wednesday making new highs on current move @ 118.27.
  • April Brent Crude again moved higher on Wednesday in a very narrow trading range as it nears the upper reaches of daily stochastic indicators.
  • Unless Brent trades to $119.01 by the end of the week it will generated third weekly VRCB formation over the last five trading weeks and likely will see a modest correction unfold in the near term.
  • Projected Daily Range: 1.43
  • Projected Weekly Range: 3.71
  • Projected Monthly Range: 6.75

WTI Crude Oil (March ‘13):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 02/13/13 @ 97.80. Confirmation of a top with a close violation on 02/04/13 @ 96.17. Downside Targets = 94.84 – 93.99.
  • OVB generated on Wednesday.
  • March WTI Crude Oil was unable to sustain the pop higher immediately following the storage report as it registered a significantly smaller injection than the previous week as it cracked through the $98 mark.
  • Should WTI trade below Wednesday’s low at $96.63, look for crude to setback lower and possibly make new lows for the month with a maximum downside objective of $91.73.
  • Projected Daily Range: 1.51
  • Projected Weekly Range: 2.49
  • Projected Monthly Range: 6.42

Natural Gas (March ‘13):

  • Short Term trend is bearish.
  • Confirmation of a bottom with a range violation on 02/13/13 @ 3.315. Confirmation of a top with a close violation on 02/08/13 @ 3.272. Downside Targets = 3.189 – 3.109.
  • March Natural Gas reversed course to make a move back higher on Wednesday as cooler weather forecast helped traders bid the market up going into Thursday’s EIA storage report.
  • Natural gas has effectively traded sideways over the past four trading sessions and if the storage number fails to impress following last weekend’s snowstorm, look for the market to drop to new lows on the week.
  • Projected Daily Range: .092
  • 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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