Oil moves higher on speculation Fed may extend easing

Daily Market Analysis for Thursday, 06/27/2013

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.
  • Possible partial confirmation of a bottom with a range violation @ 102.09. Possible confirmation of a bottom with a close violation @ 102.09 or higher.
    • August Brent Crude moved significantly off of its lows Wednesday as market speculators bought the market following what was an initially bearish storage report reading due to a declining GDP report that brought fresh hopes of additional Fed easing.
    • Brent may be able to ride the optimism of additional quantitative easing in the next few days but given the extreme technical damage that has been done, expect for it to hit a wall should it make its way back near $104.
  • Projected Daily Range: 1.66
  • 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.
  • Possible partial confirmation of a bottom with a range violation @ 96.18. Possible confirmation of a bottom with a close violation @ 96.18 or higher.
    • August WTI Crude Oil rallied aggressively off of its lows Wednesday based on the notion that a poor U.S. GDP reading would trigger and extension of quantitative easing by the Fed.
    • As is the same case with its counterpart, Brent, WTI could be able to keep the momentum positive but will likely find it difficult to make it through the $97.04-$97.50 area.
  • Projected Daily Range: 2.17
  • 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.
  • Inside compression day generated on Wednesday. Possible partial confirmation of a bottom with a range violation @ 3.779. Possible confirmation of a bottom with a close violation @ 3.779 or higher.
    • August Natural Gas moved higher off of the lows of the previous two sessions during Wednesday’s trading activity as the oversold volatility made the market too exhausted to close lower for its fifth day.
    • Heading into Thursday’s storage report, natural gas is poised to move higher above $3.80 near $3.84 and could challenge the current weekly highs with a lower than expected storage injection.
  • Projected Daily Range: .116
  • 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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