Natural gas finds support before expected inventories build

Daily Market Analysis for Wednesday, 06/19/2013

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.
    • August Brent Crude fought back higher on Tuesday after an early session drop lower was unsustainable and the market was able to close at its highest price since early April.
    • Currently the market is trading at levels where short-term oscillators are reaching peak levels and it is bumping up against daily resistance trend channels but with an accommodative tone from the FOMC meeting tomorrow, the market could continue higher towards $110 in the coming weeks.
  • 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.
  • Inside compression day generated on Tuesday.
    • August WTI Crude Oil closed at its highest spot price of the year on Tuesday and just inside the daily resistance Bollinger Band in a low volatility trading session.
    • WTI is struggling to break through the $100 level once again as it has every time it’s approached that level this year and the market will need to hear soothing words from Fed Chairman Bernanke tomorrow to push on toward my IT targets originally established in late May of $104.
  • 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 bottom with a range violation on 06/17/13 @ 3.851. Confirmation of a bottom with a close violation on 06/17/13 @ 3.875. Upside Targets = 3.954 – 3.991.
  • New highs made on the current move Tuesday @ 3.952.
    • July Natural Gas rallied to the exact 38.2% Fibonacci retracement value from the highs made in late May before being aggressively sold off toward the end of trading to generate new lows on the session before ultimately settling below the mid-point of the day.
    • Look for the market to try and take one more stab at new highs and the $4 mark before Thursday’s storage report is released which is expected to show another large build in inventories that could trigger new selling down to $3.60.
  • Projected Daily Range: .121
  • 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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