Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $0.58 higher at $49.19. The spot-month contract posted a bullish reversal on its weekly chart last week, possibly indicating the secondary (intermediate-term) trend has turned up. Weekly stochastics have not confirmed this move with a bullish crossover though last Friday's close continued to show this momentum study well below the oversold level of 20% leaving open the possibility in the near future. However, the downtrend in the nearby futures spread continues to reflect a more bearish commercial outlook that could limit buying interest. Major (long-term) support remains at $45.19.

Crude Oil: The spot-month contract closed $1.37 lower at $42.50. The secondary (intermediate-term) trend remains down with the spot-month taking out its previous low of $42.03 last week. Though the contract was able to rally slightly late in the week, the move to a new low has created doubt about this sell-off being Wave 2 of a major 5-wave uptrend. Despite weekly stochastics indicating the market is sharply oversold pressure continues to come from both commercial and noncommercial selling. Friday's CFTC Commitments of Traders report showed the latter reducing their net-long futures position by 21,250 contracts.

Distillates: The spot-month contract closed 1.43cts higher at $1.5579. While indicators continue to show the secondary (intermediate-term) trend remains down, the spot-month month contract could begin to stabilize above its recent low of $1.5212. Weekly stochastics are well below the oversold level of 20% and nearing a bullish crossover.

Gasoline: The spot-month contract closed 6.39cts higher at $1.6869. Though indicators continue to show the secondary (intermediate-term) trend remains down the spot-month contract has rallied off its test of support at $1.5930. This price marks the 61.8% retracement level of the previous rally from $1.2265 through the high of $2.1858. Support has been tied to buying interest from both commercial and noncommercial traders, the former indicated by last week's upturn (strengthening backwardation) in futures spreads. Friday's CFTC Commitments of Traders report showed noncommercial interests adding 1,993 contracts to their net-long futures position.

Ethanol: The spot-month contract closed 1.00ct higher at $1.4700. Ethanol is showing contradicting signals regarding its secondary (intermediate-term) trend. Weekly stochastics remain bearish, not yet moving below the oversold level of 20% to establish a bullish crossover. However, the spot-month contract posted a bullish reversal on its weekly chart indicating at the least the short-term trend has turned sideways. Support remains at $1.4309, a price that marks the 67% retracement level of the previous uptrend from $1.2920 through the high of $1.7090. Resistance is at the 4-week high of $1.5440.

Natural Gas: The spot-month contract closed 0.03ct higher at $2.801. The secondary (intermediate-term) trend remains sideways. Support is at $2.704, a price that marks the 67% retracement level of the rally from $2.443 through the high of $3.115. Resistance is at the 4-week high of $2.951. Weekly stochastics are neutral.

Propane (Conway cash price): Conway propane closed 2.50cts higher at $0.3500. The secondary (intermediate-term) uptrend continues to strengthen with as the spot-month contract moved to a new 4-week high of $0.3525. Weekly stochastics remain bullish.

The weekly Commitments of Traders report showed positions held as of Tuesday, August 11.

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