Technically Speaking

Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $2.19 lower at $50.46. Despite the lower weekly close the secondary (intermediate-term) trend remains up. Initial resistance is between $52.70 and $55.93, prices that mark the 38.2% and 50% retracement levels of the previous downtrend from $69.63 through the low of $42.23. Weekly stochastics are bullish.

Crude Oil: The spot-month contract closed $2.37 lower at $47.26. Despite the lower close the secondary (intermediate-term) trend is up. Resistance is between $47.24 and $50.16, prices that mark the 38.2% and 50% retracement levels of the previous downtrend from $62.58 through the spike low (part of a bullish reversal the week of August 24) of $37.75. Weekly stochastics remain bullish indicating noncommercial traders could continue to add to their net-long futures position. The most recent CFTC Commitments of Traders report showed this group holding a net-long of 264,992 contracts, an increase of 6,731 contracts. The 4-week high is up at $50.92.

Distillates: The spot-month contract closed 9.43cts lower at $1.4966. The spot-month contract fell to a new 4-week low of $1.4492, turning the secondary (intermediate-term) trend sideways. Still, the most recent technical signal on its weekly chart is a bullish key reversal the week of August 23. That week's low of $1.3745 continues to be targeted support.

Gasoline: The spot-month contract closed 8.87cts lower at $1.3280. The secondary (intermediate-term) trend remains sideways, with support at the major (long-term) low of $1.2265. Weekly stochastics are well below the oversold level of 20%, actually in single digits, indicating a bullish turn could occur soon.

Ethanol: The spot-month contract closed 1.7cts lower at $1.524. Despite the lower close the secondary (intermediate-term) trend remains up. The spot-month continues to hold between resistance at $1.522 and $1.664, prices that mark the 23.6% and 38.2% retracement levels of the previous downtrend from $2.265 through the low of $1.292. Weekly stochastics remain bullish.

Natural Gas: The spot-month contract closed 7.2cts lower at $2.430. Technical indicators show the secondary (intermediate-term) trend to be down following the new low posted the week of September 28. The spot-month contract continues to consolidate above this new low of $2.403 while weekly stochastics remains below the oversold level of 20%.

Propane (Conway cash price): Conway propane closed 4.75cts lower at $0.4050. As discussed in this analysis the last couple of weeks, the recent overbought situation in weekly stochastics set the stage for the establishment of a secondary (intermediate-term) downtrend. To that end the spot-month contract posted a new 4-week low of $0.3887 last week indicating the trend has turned down. Cash propane is immediately testing support between $0.4026 and $0.3688, prices that mark the 33% and 50% retracement levels of the previous uptrend.

The weekly Commitments of Traders report showed positions held as of Tuesday, October 13.

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