Natural gas eyes $3.65 on downward pressure

Daily Market Analysis for Wednesday, 06/12/2013

KEY TERMS

OVB      Outside Vertical Bar
VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (August ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a top with a range violation on 06/11/13 @ 102.64. Confirmation of a bottom with a close violation on 06/06/13 @ 103.33. Upside Targets = 109.11 – 113.72.
  • Possible confirmation of a top with a close violation @ 102.64 or lower.
    • August Brent Crude dropped sharply lower on Tuesday following a nearly across the board sell-off in the risk assets back below last week’s mid-point as well as the mid-point of the trading range from the previous eight weeks before finding some intraday support and rallying back near the mid-point of the trading session.
    • Brent has been forming what appears to be a significant base over the past few months of trading and with a trade outside of last week’s high it could spark a rally back near $110-$113.
  • Projected Daily Range: 1.70
  • Projected Weekly Range: 4.89
  • Projected Monthly Range: 8.97

WTI Crude Oil (July ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 06/05/13 @ 94.42. Confirmation of a bottom with a close violation on 06/06/13 @ 94.76. Upside Targets = 97.55 – 99.12.
    • July WTI Crude Oil dropped significantly lower in initial trading on Tuesday before finding solid footing just above $94 to come back and rally over $1.25 into the close of the day.
    • WTI did suffer some setbacks after the pit-session closed on Tuesday and dependent upon the EIA storage report’s figures released on Wednesday morning, oil could see further damage back below the lows of the past four trading sessions near $93.
  • Projected Daily Range: 1.87
  • Projected Weekly Range: 4.88
  • 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 Tuesday @ 3.716.
    • July Natural Gas once again saw an increase in downward pressure in the second half of trading on Tuesday as it continues to ride the daily SBB lower and press toward my long-standing call of a return to the original breakout price of $3.65.
    • Natural gas is no doubt oversold into an area that once gave huge support but with another triple digit storage injection expected this week, look for Wednesday to continue lower and possible break below $3.70 heading into the report.
  • Projected Daily Range: .090
  • Projected Weekly Range: .275
  • 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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