Natural gas downward pressure may be subsiding

Daily Market Analysis for Monday, 06/17/2013

KEY TERMS

OVB      Outside Vertical Bar
VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (August ‘13):

  • Short Term Trend is bullish.
  • Confirmation of a bottom with a range violation on 06/13/13 @ 104.19. Confirmation of a bottom with a close violation on 06/06/13 @ 103.33. Upside Targets = 109.11 – 113.72.
  • New highs made on the current move Friday @ 106.64.
    • July Brent Crude followed through in near perfect unison with last week’s report as it fell just $0.50 below the previous week’s mid-range where it found solid footing and came back to not only make new two-month highs but also generate an IT TREND REVERSAL back to bullish.
    • This past week’s price action should lead to an extension of the recent gains back to at least the $109 price area and with an increase in volatility, it could lead even higher back near the MT resistance area just below $115.
  • Projected Daily Range: 2.15
  • Projected Weekly Range: 4.94
  • Projected Monthly Range: 8.97

WTI Crude Oil (August ‘13):

  • Short Term Trend is bullish.
  • 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.
  • New highs made on the current move Friday @ 98.25.
    • August WTI Crude Oil moved to new spot annual highs this past week, although by just a single tick, as it logged its best two-week gain of the year.
    • As mentioned in last week’s report, WTI is overdue for a large injection of volatility and given the massive amount of support that the $90-$92 range has provided this year, traders should expect the market to continue higher over the coming weeks above $100 on its way to making new 13-month spot highs.
  • Projected Daily Range: 1.79
  • Projected Weekly Range: 4.57
  • 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.
  • Inside compression day generated on Friday.
    • July Natural Gas broke down once again during this past trading week as it was unable to hold the modest two-day rally heading into the weekend as the market closed near the lows of the week.
    • Natural gas entered into the old “resistance zone” mentioned in the previous few weeks that should now act as initial support to this market while generating a VRCB trading week, indicating that downward pressure may be subsiding as we near a possible IT pivot point.
      • Look for the $3.60 area to likely hold on this current move lower before a retest of the $4 mark.
  • Projected Daily Range: .105
  • Projected Weekly Range: .250
  • 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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