Natural gas risks fall to $3.75 on unstable action

Daily Market Analysis for Tuesday, 05/14/2013

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 04/20/13 @ 100.34. Confirmation of a bottom with a close violation on 04/20/13 @ 100.39. Upside Targets = 106.40 – 108.61.
  • Inside compression day generated on Monday.
    • June Brent Crude dropped lower in the latter part of trading on Monday after it was unable to sustain the mid-day move higher that once pushed the market back above $103.
    • Brent’s reluctance to break down through last week’s low following Friday’s late session rally bodes well for a market that has been sold for the better part of the last 2 months and if Brent is able to close above Monday’s high by mid-week, expect for new one-month highs to be made by the weekend.
  • Projected Daily Range: 1.81
  • Projected Weekly Range: 4.83
  • Projected Monthly Range: 9.59

WTI Crude Oil (June ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 05/03/13 @ 94.26. Confirmation of a bottom with a close violation on 05/01/13 @ 94.26. Upside Targets = 97.92.
  • Inside compression day generated on Monday.
    • June WTI Crude Oil dropped lower on Monday after gapping lower from last Friday’s settlement but was able to recoup some lost ground as it closed just a few ticks above the daily mid-range.
    • Based on the late session resilience of WTI being able to stave off multiple attempts to bring the market to new lows, expect a fast start to Tuesday’s session and for WTI to trade back above $96 and fill the weekly close gap.
  • Projected Daily Range: 1.88
  • Projected Weekly Range: 5.30
  • 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.
  • New lows made on the current move Wednesday @ 3.895.
    • June Natural Gas initially moved higher to begin this week’s trading after failing to violate last week’s low and then could not sustain an intraday rally as it settled back below the session’s mid-range.
    • Monday’s unstable price action indicates that the market should follow through on last week’s 82% close probability of taking out last week’s low, which could trigger further selling and drop the market to as low as $3.75 by the end of trading.
  • Projected Daily Range: .113
  • Projected Weekly Range: .316
  • 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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