Natural gas nears technical resistance levels

Daily Market Analysis for Monday, 08/26/2013

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.
  • New highs made on the current move Friday @ 111.23.
    • October Brent Crude closed higher again this past week after recovering from an early week setback while trading to its highest level in six months.
    • Weekly Bollinger Bands are beginning to open up once again that should allow Brent to continue toward the above listed price targets while remaining within the major-term bullish trend channel.
  • Projected Daily Range: 1.35
  • 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 bottom with a range violation on 08/23/2013 @ 105.36. Confirmation of a bottom with a close violation on 08/23/2013 @ 106.42. Upside Targets = 109.92 – 110.62.
    • October WTI Crude Oil continues to see massive swings in confirmed price action as the current backwardation in the futures market has force oil into a quasi-distribution pattern over the past month.
    • As mentioned in last week’s analysis, WTI once again saw over a $1.50 increase in the spread between itself and Brent as it should continue to see throughout the next month.
      • The short-term higher low confirmed by Friday’s close should, however, propel WTI higher into the early trading portion of this coming week as it looks to make new contract highs and work its way back toward $110.
  • Projected Daily Range: 2.07
  • Projected Weekly Range: 4.24
  • Projected Monthly Range: 9.13

Natural Gas (October ‘13): (NYMEX:NGV13)

  • 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 = 3.4613.534
  • New highs made on the current move Friday @ 3.591.
    • October Natural Gas continued to move higher throughout much of this past week, filling the weekly close gap that was left back in late July before selling off in a low volume day Friday.
    • After hitting the 50-day moving average along with exceeding short term resistance Bollinger Bands, natural gas is reaching a point of possible near term resistance. I expect gas to move just through this past week’s high near the $3.65 level before sellers come back in and try to push the market back near $3.25 as summer winds down and cooling demand starts to lessen.
  • Projected Daily Range: .096
  • 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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