Natural gas bumps higher, but constrained by weather forecasts

Daily Market Analysis for Friday 03/01/2013

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 Thursday @ 110.87.
    • April Brent Crude was unable to hold what little rally it had in early trading as it broke to new five-week lows going into the close to settle below the daily SBB for the second consecutive day.
    • Brent is about midway through the initial support zone listed earlier in this week’s reports and traders should expect increased volatility as the sequester is set to take effect.
  • Projected Daily Range: 1.78
  • 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 = 91.69 – 90.30.
  • New lows made on the current move Thursday @ 91.57.
    • April WTI Crude Oil also dropped lower on Thursday as the past two days of consolidation offered little support for the market as it made new 2013 lows at the end of the pit session.
    • Look for Friday to follow through on Thursday’s bearish price action early before a small bout of short covering returns to the market to elevate it back up near the weekly mid-point.
  • Projected Daily Range: 1.44
  • 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.
    • April Natural Gas moved back higher above $3.50 on Thursday following a larger than expected pull for storage supplies but did so without much conviction as the trade struggled to make new highs.
    • Thursday’s price action was no doubt bullish but was one of the least volatile report session’s seen in recent times as the $3.50 mark continues to provide a ceiling to a market unable to attract fresh buyers as traders look for extended weather forecast that show the cold weather over the past week may be the last week of winter as temps warm up for spring.
  • Projected Daily Range: .116
  • 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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