Natural gas rallies after storage report underwhelms

Daily Market Analysis for Friday, 05/24/2013

Daily Market Analysis for Friday, 05/24/2013

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 top with a range violation on 05/22/13 @ 103.50. Confirmation of a top with a close violation on 05/22/13 @ 102.60. Downside Targets = 99.40
  • New lows made on the current move Thursday @ 100.64.
    • July Brent Crude sank to its lowest level in 3 weeks on Thursday before rallying back to close just off the day’s high following a second half-day bounce.
    • As the daily Bollinger Bands contract to their lowest levels in 2 months, look for an increase in volatility in the coming trading sessions and more pertinent, a drop lower in initial trading on Friday.
  • Projected Daily Range: 1.75
  • Projected Weekly Range: 4.85
  • Projected Monthly Range: 9.59

WTI Crude Oil (July ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a top with a range violation on 05/22/13 @ 95.46. Confirmation of a top with a close violation on 05/22/13 @ 94.28. Downside Targets = 91.10.
  • New lows made on the current move Thursday @ 92.21. STR3MO over 80% achieved.
    • July WTI Crude Oil likewise dropped to its lowest price in 3 weeks as it impacted the daily SBB before moving back strongly into the end of the session to close down only 3 ticks.
    • Although the oil markets were able to stage a resilient comeback late in the trading session, expect for the market to move back lower following the recent ST TREND REVERSAL.
  • Projected Daily Range: 1.98
  • 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. Upside Targets = 4.195 – 4.243
  • New highs made on the current move on Thursday @ 4.269.
    • June Natural Gas moved considerably higher on Thursday following a lower than expected injection into storage and propelled the market to its highest close in 3 weeks.
    • After initially backing off the highs following the report, natural gas pressed on to new highs heading into the close and points the direction of the market up near $4.30 in early trading on Friday.
  • Projected Daily Range: .105
  • 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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