Natural gas surges higher after inventory reclassification

Daily Market Analysis for Friday, 08/09/2013

KEY TERMS

OVB      Outside Vertical Bar

VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (October ‘13):

  • Short Term Trend is bullish.
  • Confirmation of a top with a range violation on 08/06/2013 @ 106.68. Confirmation of a top with a close violation on 08/07/2013 @ 106.19. Downside Targets = 104.69 – 104.15.
  • New lows made on the current move Thursday @ 104.58. STR3MO 95% achieved.
    • October Brent Crude dropped to the $104 level mentioned after the highs were made last week on Thursday before recovering late in the session to settle back near the daily mid-point.
    • The last week of downward price action has likely been nothing more than a flush out move to run stops below the previous four weeks’ lows and Brent should resume its rally toward new contract highs.
  • Projected Daily Range: 1.64
  • Projected Weekly Range: 4.28
  • 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 08/06/2013 @ 105.69. Confirmation of a top with a close violation on 08/06/2013 @ 105.30. Downside Targets =  103.06 – 101.91
  • New lows made on the current move Thursday @ 102.22. STR3MO over 115% achieved.
    • September WTI Crude Oil dropped lower in the same fashion as Brent on Thursday to recover by the end of trading and rally back above the daily mid-range to avoid closing below the previous week’ low.
    • Look for WTI to try and narrow the gap between itself and Brent once again as they both look to push toward new contract and likely annual highs during the second half of Q3.
  • Projected Daily Range: 2.27
  • Projected Weekly Range: 5.04
  • 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
  • Bullish EROVB generated on Thursday after making new contract lows @ 3.129.
    • September Natural Gas staged quite a remarkable comeback on Thursday following a reclassified storage report that seemed to fool several traders initially before the market rallied $0.20 from the lows into the close.
    • Traders should expect further short-covering heading into the weekend as the market likely will make new highs on the week and test the $3.40 mark.
  • Projected Daily Range: .116
  • Projected Weekly Range: .246
  • 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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