Volatile oil trading could see drop near $80

Daily Market Analysis for Monday 04/08/2013

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.
  • New lows made on the current move Friday @ 103.62.
    • May Brent Crude generated a bearish DOUBLE OVB formation this past week on its way to new 2013 and eight-month spot lows.
    • The price action this past week was technically detrimental as it not only closed below the weekly support Bollinger Band but also reversed the IT trend to bearish, diminishing hopes of $120+ prices for the remainder of the year as it looks to work its way lower toward a projected ANNUAL low between $92.00 - $85.21.
  • Projected Daily Range: 2.07
  • Projected Weekly Range: 4.80
  • 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 sharply lower during this past week after four weeks of strong bullish price action met a headwind of sellers and the market had its most volatile week of trading since late October of last year.
    • Given that the market was extremely oversold heading into the close of last week, look for some backing and filling price action early in this week’s trading before falling back lower and breaking the Q1 lows on its way to a significant drop lower near the $80 mark.
  • Projected Daily Range: 1.83
  • Projected Weekly Range: 4.08
  • Projected Monthly Range: 7.11

Natural Gas (May ‘13):

  • Short Term trend is bullish.
  • Confirmation of a bottom with a range violation on 04/05/13 @ 3.986. Confirmation of a bottom with a close violation on 04/05/13 @ 4.045. Upside Targets = 4.193 – 4.238.
    • May Natural Gas reversed course from strong declines in early week trading on Friday for its largest single day gain of the year and biggest in five months as it made new 2013 highs following a bullish OVB quarter in Q1.
    • This price action should most likely lead to new highs being made on Monday but the sustainability of these highs will be questioned based on current cash pricing and warm weather moving into the NE.
  • Projected Daily Range: .126
  • Projected Weekly Range: .229
  • 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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