Oil sees $104 as line in the sand

Daily Market Analysis for Monday, 09/23/2013

KEY TERMS

OVB      Outside Vertical Bar
VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (November ‘13):

  • Short Term Trend is bearish.
  • Confirmation of a top with a range violation on 09/09/2013 @ 113.31. Confirmation of a top with a close violation on 09/09/2013 @ 112.33. Downside Targets = 104.36 – 102.84
  • VRCB generated on Friday.
    • November Brent Crude gave back most of its gains from mid-week as it moved into the weekend but was able to hold its ground more successfully than WTI as the short-term support trendline captured the lows of the week once again.
    • While Brent is still a stronger market than WTI at the moment, it will still likely face pressure if it trades above $110 and likely fall into the downside support zone also listed on the chart where the market would then be a screaming buy.
  • Projected Daily Range: 2.32
  • Projected Weekly Range: 4.87
  • Projected Monthly Range: 8.68

WTI Crude Oil (November ‘13): (NYMEX:CLX13)

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 09/12/2013 @ 108.96. Confirmation of a top with a close violation on 09/10/2013 @ 107.39. Downside Targets = 105.76104.53.
    • November WTI Crude Oil dropped back near the lows of the week heading into the close following the mid-week pop and came within just $0.50 of generating an IT confirmation of a top with a close below $104.21.
    • WTI closed below the low of the week for first time since May and once it breaks the $104 threshold it will likely move lower for the coming weeks toward the downside price targets listed above as well as in the chart sent out mid-week.
  • Projected Daily Range: 1.96
  • Projected Weekly Range: 4.85
  • Projected Monthly Range: 10.28

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
  • Possible partial confirmation of a top with a range violation @ 3.655. Possible confirmation of a top with a close violation @ 3.655 or lower.
    • October Natural Gas ran stops above the previous week’s high during last week’s trading as it generated a 99% retracement from the July highs before dropping to close in the lower 1/3 of the weekly trading range and nearly flat on the week.
    • After rallying for 31 days without a significant correction, the natural gas ST long trade has entered into the top .15% of statistical outliers in terms of duration as it’s considerably overdue for a move lower with an initial downside target of 3.476.
  • Projected Daily Range: .094
  • Projected Weekly Range: .187
  • Projected Monthly Range: .497
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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