Natural gas falls after hitting double-top at $3.50

Daily Market Analysis for Wednesday, 08/21/2013

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 bottom with a range violation on 08/12/2013 @ 106.96. Confirmation of a bottom with a close violation on 08/12/2013 @ 107.74. Upside Targets = 111.43 – 113.15.
  • Possible partial confirmation of a top @ 108.60. Possible confirmation of a top with a close violation @ 108.60 or lower.
    • October Brent Crude was hit hard in early trading Tuesday on news of the Seaway pipeline closure before rallying throughout the majority of the U.S. trading session to once again close above the $110 mark.
    • Brent has slowly been increasing the spread between itself and WTI after falling to a discount almost a month ago and should continue this process as geopolitical tensions throughout the Middle East along with technical targets located near $114 helping to support higher prices.
  • Projected Daily Range: 1.69
  • Projected Weekly Range: 3.74
  • Projected Monthly Range: 9.49

WTI Crude Oil (October ‘13): (NYMEX:CLV13)

  • Short Term Trend is bullish.
  • Confirmation of a top with a range violation on 08/20/2013 @ 106.28. Confirmation of a top with a close violation on 08/20/2013 @ 105.11. Downside Targets =  103.24 – 102.47.
    • October WTI Crude Oil dropped drastically lower on Tuesday for its largest one day decline in two months following news of the Seaway pipeline closure to settle just below the 20-day moving average.
    • Currently WTI is exuding signs of a megaphone pattern and should the next bottom confirm a higher low, the market could be due for an explosive rally to the upside that makes new annual highs above $110.
  • Projected Daily Range: 1.73
  • Projected Weekly Range: 4.92
  • 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 08/12/2013 @ 3.327. Confirmation of a bottom with a close violation on 08/14/2013 @ 3.342. Upside Targets = 3.461 – 3.534
  • Inside VRCB generated on Tuesday. Possible partial confirmation of a top with a range violation @ 3.384. Possible confirmation of a top with a close violation @ 3.384 or lower.
    • September Natural Gas dropped lower in a tight trading session on Tuesday as the market essentially logged a double top at the $3.50 level to close in the lower quartile of the daily trading session.
    • Natural gas should likely see follow-through selling on Wednesday as the neutralization of the recent bullish price action could send the market back to the downside to fill the weekly close gap that remains in the market from last week.
  • Projected Daily Range: .107
  • Projected Weekly Range: .215
  • 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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