Natural gas rises but storage report could erase gains

Daily Market Analysis for Thursday, 05/16/2013

KEY TERMS

OVB      Outside Vertical Bar
VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (July ‘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.
  • Bullish EROVB generated on Wednesday after making new lows on the current move @ 100.91.
    • July Brent Crude rallied significantly higher on Wednesday after once again finding support near the lows of the previous weeks and then rallied to make an outside session to the previous two days.
    • After rallying more than $2.50 from the lows on Wednesday, traders should expect a profit taking sell-off early in Thursday’s trading session before finding support just below $103 and moving back up near $105 into the end of the week as mentioned in previous evening reports.
  • Projected Daily Range: 1.75
  • 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.
  • New lows made on the current move Wednesday @ 92.40.
    • July WTI Crude Oil dropped sharply lower in early trading on Wednesday to its lowest intraday level in nine sessions before reversing course toward the second half of the pit session to rally and settle higher for the first time in five days.
    • As is the case with Brent, expect for the market to drop lower in initial trading back near Wednesday’s mid-range at $93.55 before finding some support and moving higher to end the session back above $95.
  • Projected Daily Range: 1.80
  • Projected Weekly Range: 5.30
  • Projected Monthly Range: 8.93

Natural Gas (June ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 05/14/13 @ 4.021. Confirmation of a bottom with a close violation on 05/14/13 @ 4.024. Downside Targets = 3.988 – 3.895.
  • VRCB generated on Wednesday making new highs on the current move @ 4.078.
    • June Natural Gas moved to the upside for its third straight day of gains on Wednesday in its most narrow day of trading in almost a month as the short-covering rally rolled along.
    • Wednesday’s tight trading range ahead of Thursday’s storage report could be signaling that the upside potential in this market is becoming tapped out and as mentioned in Tuesday evening’s report, a triple digit injection could press the market to new lows for the month.
  • Projected Daily Range: .127
  • 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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