Technically Speaking

Monthly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed at $54.70, down $1.12 on the monthly chart. The market remains in a major (long-term) uptrend, though the spot-month contract continues to sit below next resistance at $60.83. This price marks the 33% retracement level of the previous downtrend from $128.40 (March 2012) through the low of $27.10 (January 2016). Monthly stochastics are well above the overbought level of 80%, setting the stage for a bearish crossover in the months ahead.

Crude Oil: The spot-month contract closed at $52.81, down $0.91 on the monthly chart. The market's major (long-term) uptrend looks to be nearing its end as the spot-month contract holds below resistance at $55.61. This price marks the 33% retracement level of the previous downtrend $114.83 (May 2011) through the low of $26.05 (February 2016). Meanwhile, monthly stochastics are above the overbought level of 80% and nearing a bearish crossover.

Distillates: The spot-month contract closed at $1.6117, down 9.26cts on the monthly chart. The market's major (long-term) uptrend looks to be nearing its end. The spot-month contract tested resistance between $1.6883 and $1.8118 in January, prices that 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). Monthly stochastics remain above the overbought level of 80%, nearing a bearish crossover.

Gasoline: The spot-month contract closed at $1.5256, down 13.95cts on the monthly chart. Despite the lower monthly close the major (long-term) trend is up. Both December and January saw the spot-month contract test resistance at $1.7571, a price that marks the 33% retracement level of the previous downtrend from $3.4789 (April 2011) through the low of $0.8975 (February 2016). Monthly stochastics remain bullish below the overbought level of 80%.

Ethanol: The spot-month contract closed at $1.493, down 11.3cts on the monthly chart. The lower monthly close turned the major (long-term) trend sideways. Resistance remains at $1.712, a price that 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). Support is at the double-bottom low.

Natural Gas: The spot-month contract closed at $3.117, down 60.7cts on the monthly chart. Despite the lower monthly close, and what looks to be a bearish crossover by monthly stochastics, the market remains in a major (long-term) uptrend. The crossover occurred below the overbought level of 80%, meaning the market could find renewed buying interest to push it back to a test of resistance at $3.665 in the coming months. This price marks the 50% retracement level of the previous downtrend from $4.352 (December 2013) through the low of $1.611 (March 2016).

Propane (Conway cash price): Conway propane closed at $0.8075, up 10.37cts on its monthly chart. The major (long-term) trend is up with next resistance at $0.8675. This price marks the 50% 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%.

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