Natural gas poised for up move after consolidation

Daily Market Analysis for Tuesday, 07/02/2013

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 06/27/13 @ 102.09. Confirmation of a bottom with a close violation on 06/27/13 @ 102.82. Upside Targets = 104.35 – 104.89.
  • Bullish OVB generated on Monday.
    • August Brent Crude violated the highs of last week’s VRCB formation during Monday trading action as it once again edged through the mid-range of 6/20 down-thrust bar.
    • Given the market’s inability to sustain rallies for more than a week at a time, expect for this rally in Brent to fail as it approaches $104.50 and drop lower to test the June lows.
  • Projected Daily Range: 1.78
  • Projected Weekly Range: 5.07
  • Projected Monthly Range: 9.49

WTI Crude Oil (August ‘13):

  • Short Term Trend is bullish.
  • Confirmation of a bottom with a range violation on 06/27/13 @ 96.18. Confirmation of a bottom with a close violation on 06/27/13 @ 97.05. Upside Targets = 98.13 – 99.22.
  • Bullish OVB generated on Monday making new highs on the current move @ 98.28.
    • August WTI Crude Oil recovered its earlier losses on Monday to trade through the previous week’s high and close at its highest level since the 2013 annual spot highs were made two weeks ago.
    • After trading back into the range of the high day, WTI should likely face new pressure in the early stages of this week as the market bounces between $98 and $94 during the holiday shortened week before an eventual drop lower toward $90 where it should make its bottom during Q3.
  • Projected Daily Range: 2.17
  • Projected Weekly Range: 5.15
  • Projected Monthly Range: 9.13

Natural Gas (August ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a top 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 VRCB day generated on Monday. Possible Standard confirmation of a bottom @ 3.619. Possible Conservative confirmation of a bottom with a close @ 3.619 or higher.
    • August Natural Gas traded within a very thin range on Monday, logging mostly sideways trading action throughout the day and defining intraday support and resistance zones between $3.55-$3.59.
    • As the consolidation base has grown over the course of the past 2 ½ trading sessions, look for natural gas to make a move higher over the next few trading sessions back above $3.60 and near the mid-point of last Thursday’s bearish OVB day.
  • Projected Daily Range: .099
  • Projected Weekly Range: .268
  • Projected Monthly Range: .548
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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