Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $0.72 higher at $66.21. The market remains in a 3-wave secondary (intermediate-term) downtrend. The recent upward consolidation looks to be Wave B (second wave), with the 50% retracement level of Wave A from $71.28 through $61.66 at $66.53. This patter also looks like a bear flag, meaning a break of this pattern would indicate the beginning of Wave C.

Crude Oil: The spot-month contract closed $0.30 higher at $62.34. Similar to Brent crude, WTI remains in a 3-wave secondary (intermediate-term) downtrend with the recent consolidation pattern Wave B (second wave). A bearish breakout of this consolidation pattern, suggested by the still bearish weekly stochastics, would signal the start of Wave C (third wave) with a projected low below the Wave B bottom of $58.20.

Distillates: The spot-month contract closed 2.52cts higher at $1.9118. While the market remains in a secondary (intermediate-term) 3-wave downtrend, last week saw the spot-month contract post a bullish outside range on its weekly chart. This would suggest follow-through buying this coming week, with resistance at the 4-week high of $1.9943. However, weekly stochastics remain bearish above the overbought level of 20% indicating the spot-month contract should take out its previous low of $1.8084 before this downtrend is completed.

Gasoline: RBOB gasoline futures market closed 4.16cts higher at $1.9459. The market moved back into a secondary (intermediate-term) uptrend as it posted a bullish outside range and took out its previous high of $1.9530. Weekly stochastics are nearing the overbought level of 80%, but still gives the spot-month contract to move higher this coming week.

Ethanol: The spot-month contract closed 1.7cts lower at $1.493. The market's secondary (intermediate-term) uptrend looks to be nearing its end. After posting a new high, for this move, of $1.535 the nearby contract closed lower for the week. Meanwhile, weekly stochastics are above the overbought level of 80% and nearing a bearish crossover. No turn signal has been established yet, but could occur as soon as this coming week.

Natural Gas: The spot-month contract closed 4.4cts lower at $2.688. The market is generally seen as trendless as this time, with support at $2.521 still holding. This price marks the 61.8% retracement level of the previous uptrend from $1.611 through the high of $3.994. Weekly stochastics are bearish, near the oversold level of 20%.

Propane (Conway cash price): Conway propane closed 4.75cts higher at $0.6675. Last week saw the market's previous 3-wave secondary (intermediate-term) downtrend end and the next 5-wave uptrend begin. Initial resistance is pegged at $0.7359, the 38.2% retracement level of the downtrend from $0.9800 through the recent low of $0.5850.

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