Oil falls on pipeline spill, upward trend intact

Daily Market Analysis for Tuesday 04/02/2013

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 Monday @ 110.10.
    • May Brent Crude pushed steadily higher on Monday as it broke through the March highs and briefly impacted the daily RBB en route to closing at its highest level in nearly five weeks.
    • After six consecutive days of higher settlements, look for Brent to have an early setback on Tuesday before finding support just above the $110 mark.
  • Projected Daily Range: 1.40
  • 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.
  • OVB generated on Monday making new highs on the current move @ 97.80.
    • May WTI Crude Oil had a fairly volatile trading session to begin Q2 on Monday as there were opposing $1 moves throughout the day before the market ultimately settled in the upper half of the day’s trading range.
    • WTI’s moves were brought about by a pipeline spill and traders speculated it could cause a supply disruption. So long as the market does not close below $95, the upward trend should remain intact as the contract highs at $99.10 should be broken.
  • Projected Daily Range: 1.41
  • 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.
    • May Natural Gas gapped lower to begin the trading of Q2 Sunday evening but spent most of the pit session rallying from the lows to close back in the upper 70% of the day’s range and less than a penny down.
    • Monday’s strong price action indicates that natural gas should trade higher again on Tuesday, but traders should expect to face some initial resistance between $4.06 – $4.075.
      • Should natural gas fail to break through the above mentioned price zone, look for a sharp pullback and possible sell-off heading into the end of trading.
  • Projected Daily Range: .126
  • 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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