Natural gas falls most since June 2011, sees technical damage

Daily Market Analysis for Friday, 05/03/2013

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 05/01/13 @ 101.34. Confirmation of a top with a close violation on 05/01/13 @ 99.95. Downside Targets = 96.63 – 94.79.
  • Bullish DOUBLE CLOSE REVERSAL generated on Thursday.
    • June Brent Crude rallied significantly on Thursday following the ECB’s rate cut and positive U.S. jobless claims report to close back near the $103 mark.
    • Thursday’s price action gives pause to the bearish sentiment that had struck the market over the previous few trading sessions but if the market is not able to make a serious challenge to the current weekly highs on Friday and falls to close back below $101 then this move will prove to be just a news-based pop in an otherwise still down-trending market.
  • Projected Daily Range: 2.10
  • Projected Weekly Range: 5.34
  • Projected Monthly Range: 9.59

WTI Crude Oil (June ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a top with a range violation on 05/01/13 @ 92.42. Confirmation of a top with a close violation on 05/01/13 @ 91.03. Downside Targets = 88.20 – 86.57.
  • Bullish DOUBLE CLOSE REVERSAL generated on Thursday.
    • June WTI Crude Oil likewise rebounded strongly on Thursday based off the positive market dynamics that unfolded as it continued to close the spread between itself and Brent, moving to its lowest level in more than 16 months.
    • After bouncing more than $4 from the lows established on Wednesday, look for a profit taking sell-off into the weekend as the market test Thursday’s mid-point for some ST support.
  • Projected Daily Range: 2.24
  • Projected Weekly Range: 5.37
  • Projected Monthly Range: 8.93

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.
  • Bearish ERVB generated on Thursday making new lows on the current move @ 4.017.
    • June Natural Gas saw its largest daily decline since June of 2011 as it traded below the lows of the previous 2 ½ weeks, trading from upper to lower Bollinger Bands in the span of 2 trading sessions.
    • The market created significant technical damage and even though it is oversold, drastically, traders should look to sell any rallies heading into the weekend expecting not only Thursday’s low to be violated but possible a serious test of the April lows at $3.861.
  • Projected Daily Range: .143
  • Projected Weekly Range: .304
  • Projected Monthly Range: .570
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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