Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $1.05 higher at $37.93. The move to a new low of $35.98 last week indicates the secondary (intermediate-term) trend remains down. However, the spot-month contract was able to rally late, setting up a potential confirming bullish crossover below the oversold level of 20% by weekly stochastics this week.

Crude Oil: The spot-month contract closed $3.37 higher at $38.10. Technically the market posted a couple of bullish technical signals last week indicating the secondary (intermediate-term) trend has turned up. First, the spot-month contract(s) established an outside range (of the previous week) before closing higher creating a bullish reversal. However, it needs to be remembered that much of this was due to the exportation of the January and roll to the February as the spot-month contract at a strong contango. Second, the move by the futures market established a confirming bullish crossover by weekly stochastics below the oversold level of 20%.

Distillates: The spot-month contract closed 0.62ct lower at $1.1009. While indications are the secondary (intermediate-term) trend remains down, the market could begin to consolidate above last week's new low of $1.0813. Weekly stochastics are in single-digits, reflecting a sharply oversold situation that could soon attract noncommercial short-covering interest. The trend could also turn up on buying interest tied to the market's historically low price, with last week's selling moving the market to levels not seen since July 2004.

Gasoline: The spot-month contract closed 1.03cts lower at $1.2643. The market's weekly chart remains a mix of signals with stochastics showing an uptrend while futures are trending sideways at best. After posting a new low of $1.1690 last week, the market's lowest level since February 2009, the spot-month contract rallied into the close. For now, support is at the new low with resistance at the 4-week high of $1.4166.

Ethanol: The spot-month contract closed 0.2ct higher at $1.401. The market remains a mix trends with the secondary (intermediate-term) and major (long-term) sideways between the 2015 range of roughly $1.68 to $1.29. However, the minor trend is up meaning the market could see short-term buying interest. Initial resistance is at the 4-week high of $1.533. Initial support is at last week's low of $1.355.

Natural Gas: The spot-month contract closed 26.2cts higher at $2.029. The market looks to have established a secondary (intermediate-term) uptrend with a strong possibility the major (long-term) trend could also turn up at the close of the month. Weekly stochastics established a confirming bullish crossover to the initial posted the week of October 26 below the oversold level of 20%. The monthly chart is showing a potential bullish spike reversal in conjunction with stochastics also nearing a confirming bullish crossover.

Propane (Conway cash price): Conway propane closed 3.50cts higher at $0.3338. Cash propane looks to have established a secondary (intermediate-term) uptrend on its weekly chart. Last week's continued rally off the recent low of $0.2825 looks to have created a double-bottom formation in conjunction with the low of $0.2675 the week of June 8, 2015. Also, weekly stochastics posted a bullish crossover below the oversold level of 20%.

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