Technically Speaking

Monthly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed at $56.14, up $5.67 on the monthly chart. The market remains in a major (long-term) uptrend with the next upside target between $60.83 and $65.80. These prices mark the 33% and 38.2% retracement levels of the previous major downtrend from $128.40 (March 2012) through the low of $27.10 (January 2016). Monthly stochastics are near the overbought level of 80%, possibly limiting new buying interest.

Crude Oil: The spot-month contract closed at $53.72, up $4.28 on the monthly chart. The market remains in a major (long-term) uptrend with the next upside target pegged at $59.96. This price marks the 38.2% retracement level of the previous major (long-term) downtrend from $114.83 (May 2011) through the low of $26.05 (February 2016). Monthly stochastics are above the overbought level of 80% indicating the major trend could start to lose momentum.

Distillates: The spot-month contract closed at $1.7043, up 13.34cts on the monthly chart. The market remains in a major (long-term) uptrend with the spot-month contract testing resistance between $1.6883 and $1.8118. These prices mark the 33% and 38.2% retracement levels of the previous major downtrend from $3.3700 (January 2014) through the low of $0.8487 (January 2016). With monthly stochastics already above the overbought level of 80% the market could look to establish a top.

Gasoline: The spot-month contract closed at $1.6651, up 17.43cts on the monthly chart. The major (long-term) trend is up with a next target of $1.7571. This price marks the 33% retracement level of the previous major downtrend from $3.4789 (April 2011) through the low of $0.8975 (February 2016). Monthly stochastics continue to indicate the market has more room to the upside.

Ethanol: The spot-month contract closed at $1.606, down 4.4cts on the monthly chart. Despite the lower monthly close the major (long-term) trend remains up with initial resistance at $1.712. This price marks the 23.6% retracement level of the previous downtrend from $3.07 (July 2011) through the double-bottom low of $1.292 (January 2015 and January 2016). Monthly stochastics are bullish and still below the overbought level of 80%.

Natural Gas: The spot-month contract closed at $3.724, up 37.2cts on the monthly chart. The market remains in a major (long-term) uptrend with resistance between $3.665 and $4.150. These prices mark the 50% and 61.8% retracement levels of the previous downtrend from $4.352 (December 2013) through the low of $1.611 (March 2016). Monthly stochastics are well above the overbought level of 80% meaning the market could soon roll over into a downtrend.

Propane (Conway cash price): Conway propane closed at $0.7038, up 16.13cts on its monthly chart. The major (long-term) trend is up with resistance at $0.7224. This price marks the 38.2% retracement level of the previous downtrend from $1.4825 (December 2013) through the low of $0.2525 (January 2016). Monthly stochastics remain bullish but are above the overbought level of 80%. Also, cash propane's December 2016 high came within a half-cent of closing a bearish price gap between the November 2014 low of $0.7200 and December 2014 high of $0.7025.

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