Natural gas sees high probability for new yearly highs in Q2

Daily Market Analysis for Monday 04/01/2013

KEY TERMS

OVB      Outside Vertical Bar
VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (May ‘13):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 03/27/13 @ 109.60. Confirmation of a bottom with a close violation on 03/27/13 @ 109.69. Upside Targets = 111.81 – 113.06.
  • New highs made on the current move @ 110.10.
    • May Brent Crude generated a bullish outside week during this past week after violating the previous week’s low and stopping just shy of breaking the December 2012 lows at $106.38.
    • With Brent being able to settle less than a dime off the highs of the week, look for continued strength heading into next week after a modest setback and for the highs of March to be violated as the market moves back near $115.
  • Projected Daily Range: 1.74
  • Projected Weekly Range: 3.26
  • Projected Monthly Range: 6.89

WTI Crude Oil (May ‘13):

  • Short Term Trends are bearish.
  • Confirmation of a bottom with a range violation on 03/25/13 @ 93.95. Confirmation of a bottom with a close violation on 03/07/13 @ 92.03. Upside Targets = 95.35 – 96.41.
  • VRCB generated on Thursday making new highs on the current move @ 97.23.
    • May WTI Crude Oil fully confirmed a weekly TREND REVERSAL back to bullish during this past week as it closed at its second highest weekly level of the year and logged its best one week gain of the year.
    • Currently four consecutive IT TREND REVERSALs have formed in this market since September 2012, meaning that there is only a 5.5% probability that new highs for the year are not made in this new quarter and the market should work higher toward my upside objective of $104.61.
  • Projected Daily Range: 1.38
  • Projected Weekly Range: 3.10
  • Projected Monthly Range: 6.69

Natural Gas (May ‘13):

  • Short Term trend is bullish.
  • Confirmation of a bottom with a range violation on 03/27/13 @ 4.031 Confirmation of a bottom with a close violation on 03/25/13 @ 4.051. Upside Targets = 4.135.
  • Bearish OVB generated on Thursday after making new contract highs @ 4.121.
    • May Natural Gas moved higher throughout most of last week before a bearish OVB on Thursday dropped the market to close back near the weekly mid-range and just inside the weekly RBB.
    • This market is technically very overbought into significant resistance and should see a volatility sell-off, however, last quarter did generate a bullish OVB quarter and this market has a 90+% probability of making new highs for the year in Q2.
  • Projected Daily Range: .148
  • Projected Weekly Range: .246
  • Projected Monthly Range: .504
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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