Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $1.65 lower at $55.45. Weekly stochastics posted a bearish crossover above the overbought level of 80%, indicating the secondary (intermediate-term) trend is in the process of turning down. Confirmation would be a move below the 4-week low, last week's low, of $53.58 by the spot-month contract.

Crude Oil: The spot-month contract closed $1.62 lower at $52.37. Weekly stochastics posted a bearish crossover above the overbought level of 80%, indicating the secondary (intermediate-term) trend is in the process of turning down. Confirmation would be a move below the 4-week low, last week's low, of $52.37 by the spot-month contract.

Distillates: The spot-month contract closed 5.18cts lower at $1.6514. The spot-month contract posted a new 4-week low of $1.6064 last week, one week after posting a new 4-week high of $1.7647. This would suggest a two-week reversal has been established, indicating the beginning of a secondary (intermediate-term) downtrend. The last secondary signal by weekly stochastics was a bearish crossover above the overbought level of 80% the week of October 24.

Gasoline: The spot-month contract closed 2.23cts lower at $1.6117. Following the previous week's bearish reversal (outside range of the week before, establishing a new high, closing lower for week), this past week's lower weekly close established a bearish crossover by weekly stochastics confirming the move to a secondary (intermediate-term) downtrend. Initial support is at the 4-week low, last week's low, of $1.5410. Initial retracement support is pegged at $1.5179, a price that marks the 23.6% level of the previous uptrend from $0.8975 through the recent high of $1.7095.

Ethanol: The spot-month contract closed 7.5cts lower at $1.476. The secondary (intermediate-term) downtrend continues to strengthen as the spot-month contract posted an outside range before closing lower. Next support is at $1.465, a price that marks the 61.8% retracement level of the previous uptrend from $1.296 through the high of $1.760. However, with weekly stochastics still bearish above the oversold level of 20% the market could fall to the 76.4% retracement level of $1.401.

Natural Gas: The spot-month contract closed 13.4cts higher at $3.419. Despite the higher weekly close the secondary (intermediate-term) trend remains down. Last week's new 4-week low of $3.098 was a test of support at $3.084, a price that marks the 38.2% retracement level of the previous uptrend from $1.611 through the high of $3.994. The resulting rally led to a test of minor resistance at $3.440. Given the market's continued bearish weekly stochastics the spot-month contract should test the 50% retracement level of $2.803.

Propane (Conway cash price): Conway propane closed 0.12ct lower at $0.6988. Cash propane posted a doji on its weekly chart, a candlestick patter that reflects indecision at the conclusion of a trend. When combined with the bearish crossover by weekly stochastics well above the overbought level of 80%, the market looks to have established a secondary (intermediate-term) downtrend. The initial downside target is $0.5893, a price that marks the 33% retracement level of the previous uptrend from $0.3375 through the recent high of $0.7150.

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