Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $2.07 lower at $49.71. Weekly stochastics turned bearish last week, indicating the market has rejoined its secondary (intermediate-term) downtrend. Initial support at the 4-week low, last week's low, of $49.31 could quickly be broken confirming the move back to a secondary downtrend. Next support is pegged at $44.86, a price that marks the 33% retracement level of the previous uptrend from $27.10 through the high of $53.73 (week of October 10).

Crude Oil: The spot-month contract closed $2.15 lower at $48.70. The secondary (intermediate-term) trend turned down as weekly stochastics posted a confirming bearish crossover above the overbought level of 80%. The initial bearish crossover occurred the week of May 31. Initial support is at the 4-week low of $47.78, then $42.04. The latter marks the 38.2% retracement level of the previous uptrend from $26.05 through the high of $51.93, a double-top with the peak of $51.67 (week of June 6).

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Distillates: The spot-month contract closed 3.18cts lower at $1.5422. The secondary (intermediate-term) trend turned down as weekly stochastics posted a confirming bearish crossover above the overbought level of 80%. The initial crossover was established the week of May 31. Initial support is at the 4-week low of $1.5262 (week of October 3), with next support at $.3674. The latter marks the 33% retracement level of the previous uptrend from $0.8487 through the recent high of $1.6264.

Gasoline: The spot-month contract closed 6.23cts lower at $1.4691. The secondary (intermediate-term) trend remains sideways. Resistance is now at the 4-week high of $1.5370 and support the 4-week low of $1.4421 (week of October 3). Weekly stochastics continue to indicate the market is overbought, implying the next move should be a bearish breakout.

Ethanol: The spot-month contract closed 3.6cts higher at $1.645. The secondary (intermediate-term) trend is up. Weekly stochastics are above the overbought level of 80%, indicating the uptrend could soon come to an end. The spot-month contract spiked above resistance at $1.650, a price that marks the 76.4% retracement level of the previous downtrend from $1.739 through the low of $1.360, before closing back below resistance. This creates a "hanging man" candlestick pattern, another indicator that the uptrend is nearing its end.

Natural Gas: The spot-month contract closed 11.2cts higher at $3.105. Weekly charts were skewed by the expiration of the November contract and roll to December as spot-month at a strong contango. Before expiring the Nov was testing secondary (intermediate-term) support at $2.489, the 50% retracement level of the previous uptrend from $1.611 through thee high of $3.366 (week of October 10). Despite the higher weekly close the secondary trend remains down.

Propane (Conway cash price): Conway propane closed 2.50cts lower at $0.5450. Weekly stochastics posted a bearish crossover above the oversold level of 80% indicating the secondary (intermediate-term) trend has turned down. Initial support is at $0.5009, a price that marks the 33% retracement level of the previous uptrend from $0.3375 through the high of $0.5825.

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