Natural gas falls while waiting on storage report

Daily Market Analysis for Thursday 04/04/2013

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 top with a range violation on 04/03/13 @ 109.37. Confirmation of a top with a close violation on 04/03/13 @ 109.37. Downside Targets = 105.41 – 103.38.
  • Bearish ERVB generated on Wednesday confirming a ST top @ 109.37.
    • May Brent Crude led the race to the bottom in the energy sector on Wednesday following a large build in domestic supply inventories as well as a disappointing ADP report.
    • Preliminary economic data points this week suggest a weak jobs picture with this Friday’s important report due and could exacerbate the losses even further as the Q4 ’12 lows look firmly in play.
  • Projected Daily Range: 1.79
  • Projected Weekly Range: 3.26
  • Projected Monthly Range: 6.72

WTI Crude Oil (May ‘13):

  • Short Term Trends are bearish.
  • Confirmation of a top with a range violation on 04/03/13 @ 95.91. Confirmation of a top with a close violation on 04/03/13 @ 94.45. Downside Targets = 92.11 – 90.98.
    • May WTI Crude Oil dropped significantly lower on Wednesday following the large supply injection as it brought domestic supplies to their highest levels ever and pushed the price back near the 20-day moving average.
    • WTI should be able to see some modest short-covering rallies throughout early trading on Thursday as the market is oversold on all ST charts before hitting a wall near $95 and moving back lower throughout the week.
  • Projected Daily Range: 1.67
  • Projected Weekly Range: 3.10
  • Projected Monthly Range: 7.11

Natural Gas (May ‘13):

  • Short Term trend is bullish.
  • Confirmation of a bottom with a range violation on 04/03/13 @ 3.933. Confirmation of a top with a close violation on 04/03/13 @ 3.900. Downside Targets = 3.841 – 3.785.
  • VRCB generated on Wednesday.
    • May Natural Gas dropped sharply lower in later afternoon trading on Wednesday as part of a large “risk-off” session led by the energy sector.
    • Although natural gas did confirm an ST top in the market on Wednesday, its lack of volatility signals that any ensuing sell-off will likely be short lived and be very dependent upon Thursday’s storage report.
  • Projected Daily Range: .120
  • Projected Weekly Range: .246
  • Projected Monthly Range: .580
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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