Natural gas expects volatility increase as storage report nears

Daily Market Analysis for Thursday, 06/06/2013

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 06/06/13 @ 103.59. Confirmation of a top with a close violation on 05/22/13 @ 102.60. Downside Targets = 99.08 – 98.42.
  • Confirmation of a bottom with a range violation @ 103.59. Possible confirmation of a bottom with a close violation @ 103.59 or higher.
    • July Brent Crude initially moved higher in early trading on Wednesday before meeting some resistance just below last week’s high and falling to close back in the lower 15% of the daily trading range.
    • Wednesday’s price action indicates that the market may be in for an early sell-off on Thursday after trading near the daily mid-point.
  • Projected Daily Range: 2.05
  • Projected Weekly Range: 4.43
  • Projected Monthly Range: 8.97

WTI Crude Oil (July ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 06/06/13 @ 94.42. Confirmation of a top with a close violation on 05/22/13 @ 94.28. Downside Targets = 91.02 – 90.04.
  • VRCB generated on Wednesday. Confirmation of a bottom with a range violation @ 94.42.
    • July WTI Crude Oil moved slightly higher on Wednesday after gapping up in the overnight market and then meeting heavy resistance once just through the previous day’s high that led to a sell-off back below the daily mid-range.
    • The WTI market has been fixated between the $91 and $97 range over the past month and is due for a volatility injection as demand season picks up.
  • Projected Daily Range: 1.85
  • 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.
  • DOUBLE VRCB generated on Tuesday. Possible confirmation of a TREND REVERSAL to bullish with a close @ 4.041 or higher.
    • July Natural Gas generated its second consecutive inside day on Wednesday as it continues to cluster around the $4 area ahead of Thursday’s storage report.
    • Give the low volatility this market has seen over the past four trading sessions, expect for Thursday’s report to inject more than normal volume into the market and with a strong possibility of new two-month lows being made.
  • Projected Daily Range: .130
  • 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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