Oil nears 2012 highs, but setback expected

Daily Market Analysis for Thursday, 07/11/2013

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.
  • WIMP generated on Wednesday making new highs on the current move @ 108.69.
    • August Brent Crude once again moved slightly higher on Wednesday in a very tight trading range, in fact it’s most narrow trading session in five months as it gave up considerable ground to WTI.
    • As Brent rallies higher with low volatility, its sets up the possibility of a dramatic sell-off that will drop the market substantially lower should it be unable to close above $109 by tomorrow with wide range, heavy volume and a close in the upper 20% of the daily trading range.
  • Projected Daily Range: 1.57
  • Projected Weekly Range: 5.55
  • Projected Monthly Range: 9.49

WTI Crude Oil (August ‘13): (NYMEX:CLQ13)

  • 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 =  99.22102.73
  • New highs made on the current move Wednesday @ 106.66.
    • August WTI Crude Oil exploded higher on Wednesday following a larger than expected draw in supplies and its second consecutive week of nearly 10 mil barrel pulls to close at its highest level since late March of 2012.
    • With WTI less than $4 from the 2012 highs, expect a little setback on Thursday for some profit taking and to relieve a little overbought buying pressure so the market can continue a healthy move upwards near major-term objective of $115.68.
  • Projected Daily Range: 2.30
  • Projected Weekly Range: 6.23
  • Projected Monthly Range: 9.13

Natural Gas (August ‘13): (NYMEX:NGQ13)

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 07/02/2013 @ 3.619. Confirmation of a bottom with a close violation on 07/02/2013 @ 3.654. Upside Targets = 3.708 – 3.764.
  • New highs made on the current move Wednesday @ 3.787.
    • August Natural Gas had another volatile trading session throughout Wednesday’s trading session as HFTs hit in the early hours before faltering and closing in the lower quartile of the daily trading range.
    • Look for the market to continue its erratic trading pattern into tomorrow’s storage report as it should test $3.70 early in Thursday’s trading session.
  • Projected Daily Range: .132
  • Projected Weekly Range: .237
  • 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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