Technically Speaking

Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $0.56 higher at $63.87. Despite the higher weekly close the secondary (intermediate-term) trend remains down. The spot-month contract continues to hold above support at $61.49, a price that marks the 33% retracement level of the previous uptrend from $45.19 through the high of $69.22. Though weekly stochastics remain bearish, the market could look to post a minor rally to test its recent high, setting up a potential double-top formation. If not, next support is pegged at the 50% retracement level of $57.41.

Crude Oil: The spot-month contract closed $0.83 higher at $59.96. The secondary (intermediate-term) trend remains sideways with the spot-month contract holding below resistance between $58.60 and $65.41. These prices mark the 23.6% and 33% retracement levels of the previous secondary downtrend from $112.24 through the low of $42.03. Support is at the 4-week low of $56.51. Stochastics continue to hold above the overbought level of 80% with the latest signal a recent bearish crossover. The weekly CFTC Commitments of Traders report showed noncommercial interests reducing their net-long futures position by 13,663 contracts, due in large part to a reduction of long positions by 10,662 contracts.

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Distillates: The spot-month contract closed 1.96cts higher at $1.8892. The secondary (intermediate-term) trend remains sideways-to-up, with the spot-month contract holding below initial resistance at $1.9841. This price marks the 23.6% retracement level of the previous downtrend from $3.2633 through the low of $1.5890. Trendline support is pegged at $1.7416 this week, well below last Friday's closing price. Weekly stochastics are bullish.

Gasoline: The spot-month contract closed 9.11cts higher at $2.1211. The secondary (intermediate-term) trend is up with the spot-month contract moving toward a test resistance at $2.1892. This price marks the 50% retracement level of the previous downtrend from $3.1520 through the low of $1.2265. Though weekly stochastics continue to show an overbought situation, the major (long-term) price target remains $2.3527.

Ethanol: The spot-month contract closed 6.80cts lower at $1.4780. Indications are that the secondary (intermediate-term) trend remains up, with the continued inverse in the market's forward curve implying a target range between $1.7785 and $1.9410. The recent sell-off looks to be a minor (short-term) downtrend resulting in a test of support at $1.4309. This price marks the 67% retracement level of the initial rally from $1.2920 through the high of $1.7090.

Natural Gas: The spot-month contract closed 16.0cts higher at $2.590. The secondary (intermediate-term) trend remains sideways. Resistance is the 4-week high of $3.115 while support remains at the recent low of $2.443. The most recent signal by weekly stochastics is a bullish crossover below the oversold level of 20% indicating the market could resume a secondary uptrend in the coming weeks. If so, next resistance is at $3.399, the 23.6% retracement level of the downtrend from $6.493 through the $2.443 low.

Propane (Conway cash price): Conway propane closed 0.12cts higher at $0.3375. The secondary (intermediate-term) trend looks to be up following the recent bullish crossover by weekly stochastics. Initial resistance is at the previous week's high of $0.4025.

The weekly Commitments of Traders report showed positions held as of Tuesday, June 9.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

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