Natural gas flies high in volatile trading, nearing resistance

Daily Market Analysis for Wednesday 02/20/2013

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.
    • April Brent Crude once again dropped lower in initial trading only to claw its way back toward the end of trading, closing just off the session’s highs as the market refuses to relent to overbought pressures being applied.
    • Look for Brent to try and fight its way higher again on Wednesday back above $118 and the current contract highs for the year with its sights still set on cracking $120.
  • Projected Daily Range: 1.38
  • Projected Weekly Range: 3.81
  • 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 = 95.24 – 94.39.
  • New lows made on current move Tuesday. STR3MO 80% achieved.
    • April WTI Crude Oil also was able to show its resilience on Tuesday as it made new highs going into the settlement to close above last week’s mid-range.
    • Look for continued strength to push WTI higher on Wednesday as the current price action indicates the market should trade back near the previous week’s high at the double top established at $98.65 and $98.66.
  • Projected Daily Range: 1.55
  • Projected Weekly Range: 2.88
  • Projected Monthly Range: 6.42

Natural Gas (April ‘13):

  • Short Term trend is bearish.
  • Confirmation of a top with a range violation on 02/14/13 @ 3.266. Confirmation of a top with a close violation on 02/08/13 @ 3.332. Downside Targets = 3.249 – 3.169.
    • April Natural Gas exploded higher in a volatile trading session on Tuesday, trading between the contracts spread adjusted targets of $3.30-$3.35 as it impacted the 10-day moving average.
    • Look for natty to find solid resistance near the $3.35-$3.38 mark on Wednesday as warmer weather sets in to reduce heating demand as well as reaching previous technical pivot points.
  • Projected Daily Range: .108
  • Projected Weekly Range: .194
  • 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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