Natural gas looks for short covering rally after surprise inventories

Daily Market Analysis for Friday, 08/02/2013

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 08/01/2013 @ 107.90. Confirmation of a bottom with a close violation on 06/27/2013 @ 102.82. Upside Targets = 111.27 – 112.65.
  • New highs made on the current move Thursday @ 109.64.
    • September Brent Crude saw the expected increase in volatility I have been calling for come to fruition over the past few trading sessions with the combined ranges extending greater than the previous 17 trading sessions put together.
    • With a daily close above the short term resistance Bollinger Band, Brent should likely see only modest advancement into the weekend before taking aim at the short-term price targets listed above.
  • Projected Daily Range: 1.79
  • Projected Weekly Range: 4.31
  • Projected Monthly Range: 9.49

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

  • Short Term Trend is bullish.
  • Confirmation of a bottom with a range violation on 08/01/2013 @ 105.44. Confirmation of a bottom with a close violation on 08/01/2013 @ 107.89. Upside Targets =  110.03 – 111.87
    • September WTI Crude Oil traded through my projected weekly upside objective on Thursday as the “risk-on” trade was in full swing leading to the highest daily settlement price on this contract during the 2013 year.
    • Expect for an extension of these gains to continue into the weekend as the market looks to break through the daily resistance Bollinger Band and set up a move toward $110 early next week.
  • Projected Daily Range: 2.13
  • Projected Weekly Range: 4.77
  • Projected Monthly Range: 9.13

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

  • Short Term Trend is bearish.
  • Confirmation of a top with a range violation on 07/26/2013 @ 3.611. Confirmation of a top with a close violation on 07/26/2013 @ 3.563. Downside Targets = 3.4333.383
  • New lows made on the current move Thursday @ 3.341.
    • September Natural Gas dropped sharply lower in the initial aftermath of the storage report after being at the top end of analyst expectations but did rebound back above the pre-report levels in the second half of trading after filling the close gap left in the market from late February.
    • Expect for natural gas to try and make a run higher into the weekend on a short covering rally before new sellers come back into the market and pressure it lower toward the intermediate term objectives near $3.20.
  • Projected Daily Range: .096
  • Projected Weekly Range: .242
  • 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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