Natural gas struggles to find buyers at possible top

Daily Market Analysis for Wednesday 02/27/2013

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 top with a range violation on 02/20/13 @ 116.27. Confirmation of a top with a close violation on 02/20/13 @ 115.60. Downside Targets = 113.47 – 112.27.
  • New lows made on current move Tuesday @ 112.41. Downside Targets over 95% achieved.
    • April Brent Crude continued its plunger lower on Tuesday to lead the energy sector lower along with RBOB prices as it broke through the daily SBB for the first time since the December lows.
    • Current Brent price action suggest that it may be nearing a ST bottom as strong support lurks just a few dollars lower between $111.07 – $110.67.
  • Projected Daily Range: 1.89
  • Projected Weekly Range: 3.94
  • Projected Monthly Range: 6.75

WTI Crude Oil (April ‘13):

  • Short Term Trends are bearish.
  • 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 @ 91.92.
    • April WTI Crude Oil opened on its low and spent much of the session trading higher before faltering above $93 to settle just around the day’s mid-point and back inside the daily Bollinger Bands.
    • Current stochastic indicators are still pointing sharply lower and WTI has just penetrated the initial IT support zone meaning it, like Brent, could trade another $1-2 lower before finding its bottom in the near term.
  • Projected Daily Range: 1.65
  • Projected Weekly Range: 3.64
  • Projected Monthly Range: 6.42

Natural Gas (April ‘13):

  • Short Term trend is bearish.
  • Confirmation of a bottom with a range violation on 02/20/13 @ 3.337. Confirmation of a bottom with a close violation on 02/22/13 @ 3.349. Upside Targets = 3.447 – 3.511.
  • New highs made on current move Tuesday @ 3.517.
    • April Natural Gas moved higher in early trading on Tuesday but logged a series of lower intraday highs and lows while closing in the lower third of the day’s trading range.
    • Tuesday price action is indicative of a topping formation after breaking through the previous confirmed top but being unable to close above it signals that no new buyers were interested at elevated levels and this market should work its way down towards the current weekly lows heading into Thursday storage report.
  • Projected Daily Range: .092
  • Projected Weekly Range: .201
  • 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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