Natural gas selling pressure mounts after four down days

Daily Market Analysis for Wednesday, 06/26/2013

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 received the day-and-a-half volatility pop I expected to begin this week’s trading activity before faltering in the latter half of the trading session to close back below the day’s mid-range.
    • Traders should brace themselves for a possible influx of bearish volatility that should not only challenge this week’s low but also the lows of the past two months, setting the stage for a new annual low in Q3.
  • Projected Daily Range: 2.13
  • 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.
    • August WTI Crude Oil trade to the exact tick I projected it would in this weekend’s report (96.17) on Tuesday before likewise faltering in the second half of the trading day to settle just below the daily mid-range as some of the early morning optimism faded.
    • Economic struggles in China as well as a looming stock market correction in the near term should continue to apply pressure on the crude oil market heading into Wednesday’s storage report and without a strong bullish reading; the market could trade back below $93.50.
  • Projected Daily Range: 2.41
  • 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 Tuesday @ 3.668.
    • August Natural Gas continued to drop lower on Tuesday, marking the fourth consecutive down trading session during which time the market has lost more than 30 cents in value.
    • As the expiring July contract traded to the exact tick of the old resistance high price of $3.645, look for the market to follow through on the bearish price action in early trading on Wednesday and possibly finding support near the daily SBB.
  • Projected Daily Range: .115
  • 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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