Oil risks fall to $83 after weak rally

Daily Market Analysis for Monday, 04/22/2013

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.
  • Possible confirmation of a bottom with a range violation @ 100.34. Possible confirmation of a bottom with a close violation @ 100.34 or higher.
    • June Brent Crude likewise moved lower for the first half of trading this past week before finding some initial support at my first IT downside target of $96.77 and just above the lower reaches of the bearish MT trend channel before rallying to close up near the weekly mid-range.
    • Given how much technically weaker Brent is in comparison the WTI, traders should look for this market to rally back up near the weekly SBB price of $101.02 before sellers return and push the market back near this week’s low to test the strength of value buyers.
      • If this low cannot hold, look for more volatility to the downside as my Q2 initial downside objective of $93.27.
  • Projected Daily Range: 2.45
  • Projected Weekly Range: 6.59
  • 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.
  • VRCB generated on Friday. Possible confirmation of a bottom with a range violation @ 89.07. Possible confirmation of a bottom with a close violation @ 89.07 or higher.
    • June WTI Crude Oil made new lows dating back to early Q4 2012 last week as it penetrated the weekly SBB for the first time since the 2012 annual low was made and then rallied to close just below the weekly mid-point.
    • Following Friday’s weak rally that was unable to hold a close above $89, this market should technically break down once again to test this past week’s low and if it is unable to hold, then follow through lower toward my initial Q2 downside price objective of $83.06.
  • Projected Daily Range: 2.39
  • Projected Weekly Range: 5.27
  • 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.
  • Inside VRCB generated on Friday.
    • May Natural Gas traded within an extremely tight trading range to end the week on Friday following a huge move up Thursday on a miss in this week’s storage expectations, generating its highest weekly settlement since July 2011 while blowing through the weekly RBB for the sixth consecutive trading week.
    • Despite shifting weather formations and the enormous movement higher that this market has seen without retracement, bulls continue to push the market higher as they seem determined on achieving the $4.50 price target published by some institutional analyst before letting the market take a breath for a mean-regressive correction.
  • Projected Daily Range: .136
  • Projected Weekly Range: .297
  • 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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