Oil falls toward $80 as equities, dollar rally

Daily Market Analysis for Thursday, 04/18/2013

KEY TERMS

OVB      Outside Vertical Bar

VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (June ‘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 = 96.77 – 93.27.
  • Bearish OVB generated on Wednesday making new lows on the current move @ 97.26.
    • June Brent Crude dropped lower on Wednesday in another bearish outside trading session following a less than expected pull from domestic supply inventories and a downgrade in global growth expectations from the IMF.
    • Brent could see some ST recovery in early trading on Thursday but has a strong technical probability of generating new lows on the week and targeting $95 by the weekend.
  • Projected Daily Range: 2.56
  • Projected Weekly Range: 5.59
  • Projected Monthly Range: 6.72

WTI Crude Oil (June ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a top with a range violation on 04/09/13 @ 93.05. Confirmation of a top with a close violation on 04/09/13 @ 91.91. Downside Targets = 88.75 – 87.54.
  • Bearish OVB generated on Wednesday making new lows on the current move @ 86.36.
    • June WTI Crude Oil dropped lower to close at its lowest level since early July 2012 following a modest decline in storage compared with calls for a much larger pull Tuesday evening as the market continue to work its way lower this week.
    • A falling U.S. equity market and rallying U.S. dollar should continue to give trouble to this abundantly supplied market as it moves lower to threaten the $80 mark in short order.
  • Projected Daily Range: 3.25
  • Projected Weekly Range: 4.70
  • 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 moved back higher again on Wednesday, following the similar pattern outlined in Tuesday evening’s report where buyers step into to scoop the market from overnight losses and push it higher into the end of trading.
    • While many are projecting Thursday’s storage number to highlight the first build of the season, it will need to be beyond analyst expectations in order to trigger the kind of selling that breaks through and closes below the current weekly low and signals a possible ST top has formed in the market.
  • Projected Daily Range: .129
  • Projected Weekly Range: .260
  • 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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