Natural gas backtracks ahead of inventories

Daily Market Analysis for Wednesday, 07/24/2013

KEY TERMS

OVB      Outside Vertical Bar

VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (September ‘13):

  • Short Term Trend is bullish.
  • Confirmation of a bottom with a range violation on 06/27/2013 @ 102.09. Confirmation of a bottom with a close violation on 06/27/2013 @ 102.82. Upside Targets = 104.35 – 104.89.
  • 2nd consecutive inside compression day generated on Tuesday. Possible partial confirmation of a top with a range violation @ 107.00. Possible confirmation of a top with a close violation @ 107.00 or lower.
    • September Brent Crude managed to close higher for the second straight day on Tuesday while once again remaining in a constricted trading range on lower than average volume and increasing its spread over WTI.
    • As previously discussed in my recent newsletters, Brent should likely continue to try and push higher through the venerable $110 threshold and further expand its distance from WTI as bullish technicals suggest an impending injection of market volatility soon.
  • Projected Daily Range: 1.33
  • Projected Weekly Range: 4.46
  • Projected Monthly Range: 9.49

WTI Crude Oil (September ‘13): (NYMEX:CLU13)

  • Short Term Trend is bullish.
  • Confirmation of a top with a range violation on 07/23/2013 @ 106.47. Confirmation of a bottom with a close violation on 06/27/2013 @ 97.05. Upside Targets =  99.22102.73
  • Possible confirmation of a top with a close violation @ 106.47 or lower.
    • September WTI Crude Oil partially confirmed a short term top on Tuesday but was unable to follow through with a corresponding close signal as the market rallied for most of the pit session off its overnight lows.
    • WTI remains resilient as the supply glut has been eased over the past three weeks, however, shifting market dynamics along with various technical warnings could place pressure on the domestic oil and force a drop lower back near $102.75.
  • Projected Daily Range: 2.03
  • Projected Weekly Range: 5.74
  • Projected Monthly Range: 9.13

Natural Gas (September ‘13): (NYMEX:NGU13)

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 07/18/2013 @ 3.719. Confirmation of a bottom with a close violation on 07/02/2013 @ 3.654. Upside Targets = 3.708 – 3.764.
  • Inside compression day generated on Tuesday.
    • September Natural Gas followed through on Monday afternoon’s call to make a push back toward the initial highs of the week before reaching an equilibrium point just above $3.75.
    • Look for the market to do some further backing and filling on Wednesday ahead of this week’s storage report as it looks to take aim at $3.670.
  • Projected Daily Range: .122
  • Projected Weekly Range: .224
  • 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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