Technically Speaking

Weekly Analysis: Energy Markets

By Darin Newsom , DTN Senior Analyst
Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $0.35 lower at $33.01. Despite another lower weekly close the secondary (intermediate-term) trend remains up. Trendline support this week is pegged at $31.80. Initial resistance remains at $37.14, a price that marks the 23.6% retracement level of the previous downtrend from $66.93 through the major low of $27.10. The 4-week high is at $36.25. Weekly stochastics remain bullish following a crossover below the oversold level of 20% the week of January 18.

Crude Oil: The spot-month contract closed $0.20 higher at $29.64. The secondary (intermediate-term) trend remains sideways between support at the recent major (long-term) low of $26.05 and resistance at the 4-week high of $34.82. The latter is also a test of the 23.6% retracement level of the previous downtrend from $62.58 through the previous low of $26.19. Last Friday's weekly CFTC Commitments of traders report* showed noncommercial interests again reducing their net-long futures position by 28,890 to 158,989 contracts.

Distillates: The spot-month contract closed 4.38cts lower at $1.0255. Despite the lower weekly close the secondary (intermediate-term) trend remains up. However, the weekly close was near trendline support ($0.9984), with this week's level pegged at $1.0359. Weekly stochastics are bullish, with the most recent signal a crossover below the oversold level of 20% the week of January 19. Last Friday's CFTC Commitments of Traders report* showed noncommercial interests adding 481 contracts to their net-long futures position.

Gasoline: The spot-month contract closed 8.38cts lower at $0.9594. The market continues to indicate the recent major (long-term) low of $0.8975 (week of February 8) could be secondary (intermediate-term) Wave C low on its weekly chart. However, last week's failed rally has the spot-month contract back within striking distance of the major low. If the market is to rally it will need to see renewed noncommercial buying interest. Last Friday's weekly CFTC Commitments of Traders report showed noncommercial interests increasing their net-long futures position by 8,249 contracts.

Ethanol: The spot-month contract closed 3.3cts higher at $1.409. The secondary (intermediate-term) trend is up with initial resistance at the 4-week high of $1.441. Weekly stochastics remain bullish above the oversold level of 20%.

Natural Gas: The spot-month contract closed 16.2cts lower at $1.804.

The secondary (intermediate-term) trend remains sideways with support at the previous low of $1.684 (week of December 14, 2015). The minor (short-term) trend has extended well below retracement support despite daily stochastics sitting in single-digits reflecting a sharply oversold short-term situation. Weekly stochastics are approaching the oversold level of 20% with the most recent signal being a bullish crossover the week of October 26, 2015.

Propane (Conway cash price): Conway propane closed 0.87ct lower at $0.3288. The secondary (intermediate-term) trend remains up with the market between resistance at $0.3249 and $0.3612. These prices mark the 33% and 50% retracement levels of the previous sell-off from $0.4700 through the low of $0.2525. Weekly stochastics remain bullish.

*The weekly Commitments of Traders report showed positions held as of Tuesday, February 16.

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

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