WTI oil targets $104 after erasing losses

Daily Market Analysis for Monday, 05/20/2013

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 rebounded in the middle of the trading week after some initial losses to close at its highest weekly level in six weeks and just shy of $105 as the market appears to be trying for a push toward $110.
    • With a daily close above $105, the market should be able to slowly work its way higher before it meets initial resistance at the Q1 lows ($107) followed by a period of stagnation between there and $110.
  • Projected Daily Range: 1.93
  • Projected Weekly Range: 4.85
  • Projected Monthly Range: 9.59

WTI Crude Oil (July ‘13):

  • Short Term Trend is bullish.
  • 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 was able to erase early week declines heading into the weekend on positive US economic data points as it settled just a couple pennies lower week over week.
    • The current shorter term time intervals in the crude market is showing a possible inverted head and shoulders formation that if fulfilled, projects that the market could continue the recent month long rally upward to as high as $104.
      • Should this rally occur, it would generate a breakout signal on the weekly charts and could propel the next major term move to the upside and challenge the 2012 highs.
  • Projected Daily Range: 2.10
  • Projected Weekly Range: 4.68
  • 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.
    • June Natural Gas reversed course to bullish price action late in the trading week after declines from the largest storage injection of the season were wiped away by comments from the DOE detailing the approval of natural gas exports abroad.
    • While the news is no doubt bullish over the long-term, in the short term the market is looking at likely increases in production and larger injections into storage to help combat inflated prices for an intermediate term correction before the next leg of the rally resumes that should take the market over $5 by years end.
      • Should the market turn back bearish over the coming weeks, look for support between $3.645 - $3.77 as an ideal I.T. buy zone.
  • Projected Daily Range: .115
  • Projected Weekly Range: .283
  • 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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