Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $0.89 higher at $48.72. The secondary (intermediate-term) trend remains up as the spot-month contract posted a new 4-week high of $49.85. However, weekly stochastics are above 90% indicating the market is sharply overbought and could have difficulty finding continued buying interest. If the trend starts to turn down initial support is at $42.27, a price that marks the 33% retracement level of the current secondary uptrend.

Crude Oil: The spot-month contract closed $1.54 higher at $47.75. While indications are that the secondary (intermediate-term) trend remains up, the spot-month contract fell back from its test of resistance at $48.63 late last week. This price marks the 61.8% retracement level of the previous secondary downtrend. With weekly stochastics above 90% the market looks to be in position to establish a secondary downtrend, putting initial support at $41.32.

Distillates: The spot-month contract closed 8.69cts higher at $1.4900. The secondary (intermediate-term) uptrend strengthened last week with the spot-month contract closing near its weekly high of $1.5200. However, weekly stochastics are above 90% indicating the market is sharply overbought and vulnerable to increased selling interest. If pressure starts to build, initial support is pegged at $1.2965.

Gasoline: The spot-month contract closed 4.74cts higher at $1.6356. The secondary (intermediate-term) trend is up as the spot-month contract posted a new 4-week high of $1.6637 last week. However it also fell back to a close below resistance at $1.6482, a price that marks the 33% retracement level of the previous downtrend. Given that weekly stochastics are above 90%, indicating a sharply overbought market, gasoline could be looking at a possible turn to a secondary downtrend with initial support pegged at $1.4086.

Ethanol: The spot-month contract closed 6.2cts higher at $1.606. The market extended its secondary (intermediate-term) uptrend as the spot-month contract posted a new 4-week high of $1.627. However, as is the case with most of the energy complex, weekly stochastics are indicating the market is in an overbought situation and vulnerable to increased selling interest. If so initial support is pegged at $1.501, a price that marks the 38.2% retracement level of the current uptrend from $1.296 through last week's high.

Natural Gas: The spot-month contract closed 3.4cts lower at $2.062. Despite the lower weekly close the secondary (intermediate-term) trend remains up. The spot-month contract found renewed buying interest as it tested minor (short-term) support between $2.001 and $1.903, indicating the market could look to extend its uptrend beyond resistance at the 4-week high of $2.195. Weekly stochastics remain bullish below the overbought level of 80%.

Propane (Conway cash price): Conway propane closed 1.50cts lower at $0.4850. Cash propane looks to have established a spike reversal last week, indicating the secondary (intermediate-term) trend has turned down. Confirmation of this would be the bearish crossover by weekly stochastics above the overbought level of 80%. Given this, initial support is pegged at $0.4459, a price that marks the 33% retracement level of the previous uptrend from $0.2525 through last week's high of $0.5425.

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