Natural gas targets $3.87 after rally fizzles

Daily Market Analysis for Tuesday, 06/04/2013

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 = 99.08 – 98.42.
  • Bullish OVB generated on Monday after making new lows of the current move @ 99.66.
    • July Brent Crude shook off early losses in the trading session to come back and rally strongly throughout most of the day as shorts were unable to push the market through the May lows.
    • Given Monday’s price action, traders should expect to see the market drop back near $101.14 where it should find some initial support and move back up near $103.
  • Projected Daily Range: 2.31
  • Projected Weekly Range: 4.43
  • Projected Monthly Range: 8.97

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 = 91.02 – 90.04.
  • New lows made on the current move Monday @ 91.26.
    • July WTI Crude Oil followed in the same path as Brent did on Monday as it logged its fourth consecutive day of lower highs and lower lows before closing in the upper 85% of the daily trading range.
    • While Monday’s price action could be just a short-covering rally, the current ST support levels above $90 have held for the past month and unless May’s low is violated, the market may be readying itself for a possible injection of volatility.
  • Projected Daily Range: 2.36
  • Projected Weekly Range: 4.61
  • Projected Monthly Range: 9.15

Natural Gas (June ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a top with a range violation on 05/30/13 @ 4.117. Confirmation of a top with a close violation on 05/30/13 @ 4.023. Downside Targets = 3.957 – 3.879.
  • New lows made on the current move Monday @ 3.951.
    • July Natural Gas finished the session virtually unchanged on Monday after being unable to hold the early morning rally into the close and settled back below the daily mid-range.
    • Based on Monday’s settlement, expect for natural gas to continue lower into the early part of Tuesday as it looks to challenge the May lows en route back near the original contract breakout price of $3.87.
  • Projected Daily Range: .115
  • Projected Weekly Range: .269
  • Projected Monthly Range: .614
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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