Natural gas volatility spikes as volume overtakes WTI

Daily Market Analysis for Thursday 04/11/2013

KEY TERMS

OVB      Outside Vertical Bar
VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (May ‘13):

  • Short Term Trend is bearish.
  • 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.
  • Inside VRCB generated on Wednesday.
    • May Brent Crude was unable to build on Tuesday’s bullish momentum as the market settled lower in a tight trading range after being unable to new attract buyers above $106.25.
    • Expect another push higher briefly on Thursday before the market reaches a critical mass level and possibly triggers a sell-off heading into the close of the week.
  • Projected Daily Range: 1.90
  • Projected Weekly Range: 4.80
  • Projected Monthly Range: 6.72

WTI Crude Oil (May ‘13):

  • Short Term Trend is bullish.
  • Confirmation of a bottom with a range violation on 04/09/13 @ 93.76. Confirmation of a bottom with a close violation on 04/09/13 @ 94.20. Upside Targets = 95.23 – 96.15.
    • May WTI Crude Oil was able to squeak out a modest gain on Wednesday fueled by a late session rally near the $95 mark but was unable to crack through the barrier as it closed in on the 50-day moving average.
    • The market is giving signs as if it is reaching an equilibrium point and as mentioned in Tuesday evening’s report, I expect this market to face significant resistance at current level up to $96.
  • Projected Daily Range: 1.44
  • 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 saw quite the volatile trading session on Wednesday as the market shot up higher to test the weekly highs during early trading before gains were liquidated into the close to settle below $4.10.
    • Spot natural gas also saw more volume than the WTI contract for the second time this week with heavy volatility and record open interest, which will provide for excess volatility around the storage report tomorrow and over the next few weeks as injection season gets underway and bulls begin to liquidate profits from the last month of gains.
  • Projected Daily Range: .124
  • 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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