Natural gas looks to regain weekly loss

Daily Market Analysis for Monday, 04/29/2013

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 bottom with a range violation on 04/22/13 @ 100.34. Confirmation of a bottom with a close violation on 04/22/13 @ 100.39. Upside Targets = 102.57 – 103.74.
  • Inside VRCB generated on Friday.
    • June Brent Crude likewise followed the energy sector higher throughout this past week, although with less conviction than WTI, to generate a close above the high of the low week and back inside the weekly Bollinger Bands.
    • After being sold so hard since February, Brent does have the possibility of making a shorter term move back to the upside to as high as $107 where it will face some serious resistance. This market has shown reluctance to lead the way higher for sustainable moves so at the first true sign of short term weakness, technically this market should be sold expecting the current April low to be violated.
  • Projected Daily Range: 1.71
  • Projected Weekly Range: 5.34
  • Projected Monthly Range: 9.28

WTI Crude Oil (June ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 04/22/13 @ 89.07. Confirmation of a bottom with a close violation on 04/22/13 @ 89.19. Upside Target = 90.33 – 93.32.
  • Inside compression day generated on Friday.
    • June WTI Crude Oil moved sharply higher throughout last week, retracing most of the losses the market sustained during the previous three weeks before stopping just short of $94 before backing off of the weekly highs as it traded into the weekend.
    • After this sizable one week rally, I would expect for the market to trade back in the direction of the trend for an initial testing of the $90 level to seek short-term support for a move back above $95. If no support can be found there then look for a continuation move lower toward the current contract lows and the Q2 downside objective of $83.06.
  • Projected Daily Range: 2.26
  • Projected Weekly Range: 5.37
  • Projected Monthly Range: 7.11

Natural Gas (June ‘13):

  • Short Term Trend is bullish.
  • Confirmation of a top with a range violation on 04/24/13 @ 4.201 Confirmation of a top with a close violation on 04/24/13 @ 4.200. Downside Targets = 3.988 – 3.875.
  • New lows made on the current move Friday @ 4.090.
    • June Natural Gas saw its first down week in more than two months during this past trading week as warmer weather forecast revisions and a storage number in line with expectations helped move some length out of the market.
    • Although the market closed down more than 21 cents from last week, Friday’s strong rally into the close points toward a possible move back higher to begin the week and should test the patience of shorts up to as highs as $4.35 where strong selling will need to occur to cement that rally has reached its peak for the short-term.
  • Projected Daily Range: .132
  • Projected Weekly Range: .304
  • 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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