commodities

Natural gas pullback could test annual lows

Kris Hicks
September 9, 2013 05:53 AM
Daily Market Analysis for Monday, 09/09/2013

KEY TERMS

OVB      Outside Vertical Bar

VRCB   Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (November ‘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 = 117.15 – 118.81.
  • New highs made on the current move Friday @ 114.85.
    • November Brent Crude closed the week higher after some low volume stop running occurred in holiday hours trading Monday.
    • November Brent is once again approaching the contract highs located just above $115 and with current both short and intermediate term momentum oscillators pointing higher, some early week bullish volatility should push Brent to new annual highs above $120 by the end of the quarter.
  • Projected Daily Range: 1.69
  • Projected Weekly Range: 4.61
  • Projected Monthly Range: 8.68

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

  • Short Term Trend is bullish.
  • Confirmation of a bottom with a range violation on 09/06/2013 @ 108.84. Confirmation of a bottom with a close violation on 09/06/2013 @ 110.53. Upside Targets = 114.19 – 115.68.
    • October WTI Crude Oil found support just below the $105 level mentioned in last week’s report and was able to restore solid positive momentum throughout the trading week to close at its highest level of the year on Friday.
    • As WTI continues to track the major term support trend-channel first illustrated in early 2013 and having already broke through the 2012 highs, traders should expect the market to remain on course to target our annual upside price target of $115.68.
  • Projected Daily Range: 1.94
  • Projected Weekly Range: 5.76
  • 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 = 3.461 – 3.534
  • Possible partial confirmation of a top with a range violation @ 3.516. Possible confirmation of a top with a close violation @ 3.516 or lower.
    • October Natural Gas indeed dropped lower this past week following a larger than expected injection into storage stockpiles after trading back to the 20-week moving average where it found significant IT resistance.
    • As mentioned in last week’s report, this type of price action formation could typically lead to another sustained move lower and log a solid retest of both the Q3 and annual lows.
  • Projected Daily Range: .098
  • Projected Weekly Range: .210
  • Projected Monthly Range: .497
About the Author

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.