WTI oil rally sees Brent spread narrow to $6

Daily Market Analysis for Tuesday, 06/25/2013

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.
  • New lows made on the current move Monday @ 99.67.
    • August Brent Crude faced some early session pressure as the global “risk-off” sentiment continued into the early goings of this week. It was able to mount a modest comeback in the afternoon but nowhere nearly as strongly as WTI as the spread narrowed to less than $6.
    • Monday’s ability to close positive after breaching the $100 threshold could give the market a little support but ultimately traders should expect for a breakdown into the beginning of Q3 as the market looks to establish its annual low.
  • Projected Daily Range: 2.10
  • Projected Weekly Range: 5.60
  • 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.
  • New lows made on the current move Monday @ 92.67.
    • August WTI Crude Oil rallied aggressively toward the end of the pit session on Monday after initially facing some pressure with a weak U.S. stock market as well as a Chinese downgrade as it once again found support just above $92.
    • These $92+ price points have now acted as support over the past two months of trading and although Monday’s late surge may give some evidence of a stronger oil market, look for a continuation of downward price action in the first half of this trading week.
  • Projected Daily Range: 2.08
  • Projected Weekly Range: 5.14
  • Projected Monthly Range: 9.15

Natural Gas (August ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 06/21/13 @ 3.854. Confirmation of a top with a close violation on 06/21/13 @ 3.793. Downside Targets = 3.638 – 3.584.
  • New lows made on the current move Monday @ 3.744.
    • August Natural Gas followed through to achieve the weekly price action probabilities of trading through a confirmation bar low as well as the previous week’s low before finding some intraday support near the $3.75 level.
    • Monday’s inability to break through the lows of the previous two trading weeks could signal that the market may be digesting some weather related strength over the coming days and press back toward $3.85 Tuesday as the July options expire.
  • Projected Daily Range: .122
  • Projected Weekly Range: .272
  • 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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