Technically Speaking

Weekly Analysis: Energy Markets

By Darin Newsom , DTN Senior Analyst
Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $2.09 higher at $35.10. The secondary (intermediate-term) trend remains up. With weekly stochastics growing more bullish the spot-month contract is pressing initial resistance at $37.14 (last week's high was $37.00). This price marks the 23.6% retracement level of the previous downtrend from $69.63 through the low of $27.10. Surprisingly enough, support has been coming from commercial buying indicated by weakening contango (carry) in the nearby futures spread.

Crude Oil: The spot-month contract closed $3.14 higher at $32.78. The secondary (intermediate-term) trend is nearing a turn up, needing only a new four-week high to confirm a series of bullish crossover by weekly stochastics between the week of December 21, 2015 and week of January 19. Last week's high (now the 4-week high) was $34.69. This was a test of initial resistance at $34.67, the 23.6% retracement level of the previous downtrend from $62.58 through the low of $26.05. Next resistance is the 33% retracement level of $38.21.

Distillates: The spot-month contract closed 2.57cts higher at $1.0512. Though the market has seen a minor (short-term) consolidation period the secondary (intermediate-term) trend remains up. However, the spot-month contract needs to move beyond its 4-week high of $1.1181 to start building bullish momentum again. On the bearish side, trendline support is pegged at $1.0733 this week, above last week's close.

Gasoline: The spot-month contract closed 5.72cts higher at $1.0166. The market remains complicated with the weekly close only chart still in a downtrend. However, the spot-month March contract is set to go off the board following Monday's close with the April contract holding an almost 28-cent premium. This will skew weekly charts, creating a bullish breakout to go along with a recent series of bullish crossover by weekly stochastics. If the secondary (intermediate-term) trend does turn up, initial resistance is pegged at the 23.6% retracement level of $1.4296.

Ethanol: The spot-month contract closed 2.2cts higher at $1.387. After failing to take out its 4-week high the spot-month contract could now look at extending its minor (short-term) downtrend through the 4-week low of $1.365. Minor support is pegged at $1.369 and $1.344, prices that mark the 50% and 67% retracement levels of the previous uptrend from $1.296 through the high of $1.441.

Natural Gas: The spot-month contract closed 1.3cts lower at $1.791. The minor (short-term) trend looks to have turned up last week after the spot-month contract posted a secondary (intermediate-term) double-bottom at $1.682 (the previous low was $1.684). Friday's rally led to a bullish crossover by daily stochastics, while the weekly study remains neutral to bearish above the oversold level of 20%. However, the weekly chart is showing a potential bullish spike reversal off what could be viewed as a double-bottom low.

Propane (Conway cash price): Conway propane closed 5.12cts higher at $0.3800. The secondary (intermediate-term) uptrend continues to strengthen, pushing toward a test of resistance at $0.3976. This price marks the 67% retracement level of the previous downtrend from $0.4700 through the low of $0.2525. Weekly stochastics remain bullish below the overbought level of 80% meaning the market has room to move higher.

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