Natural gas falls on storage injection, looks for rally

Daily Market Analysis for Friday, 06/21/2013

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 top with a range violation on 06/20/13 @ 105.10. Confirmation of a top with a close violation on 06/20/13 @ 102.15. Downside Targets = 101.07 – 100.35.
  • Bearish ERVB generated on Thursday. Confirmation of a top with a range violation @ 105.10. Confirmation of a top with a close violation @ 102.15.
    • August Brent Crude led the energy sector lower on Thursday as it saw its largest injection of volatility in months for its largest down day of 2013, eradicating nearly all of the gains for the entire month.
    • Given that the volatility is significantly oversold intraday, expect for Brent to experience a short-covering rally back to as high as 103.66 where it should meet equilibrium heading into the weekend.
  • Projected Daily Range: 2.05
  • Projected Weekly Range: 4.94
  • Projected Monthly Range: 8.97

WTI Crude Oil (August ‘13):

  • Short Term Trend is bullish.
  • Confirmation of a top with a range violation on 06/20/13 @ 97.64. Confirmation of a top with a close violation on 06/20/13 @ 96.63. Downside Targets = 93.43 – 91.89.
  • Bearish ERVB generated on Thursday.
    • August WTI Crude Oil closed at its lowest level in 2 weeks on Thursday after generating new spot contract annual highs the previous day as the deleveraging of global risk assets hit the oil markets particularly hard.
    • Like other markets that experienced the crushing sell-off on Thursday, WTI should see a modest volatility pop higher into the weekend before new selling returns next week.
  • Projected Daily Range: 2.08
  • 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.
  • C < LOHB generated on Thursday. Possible confirmation of a top @ 3.834. Possible confirmation of a top with a close violation @ 3.834 or lower.
    • July Natural Gas sank lower on Thursday following a storage report that was in line with expectations as the broader market sell-off added a little pressure to the already weak market.
    • Natural gas did fare better than the rest of the energy sector after making several pushes higher throughout the day.
      • Given the oversold volatility across the commodity markets, expect a short-covering rally heading into the weekend.
  • Projected Daily Range: .098
  • 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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