Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $0.18 higher at $55.99. The market remains in a secondary (intermediate-term) sideways trend between the high of $58.37 (week of January 3) and low of $53.58 (week of January 9). Weekly stochastics continue to remain bearish above the overbought level of 80%, continuing to indicate the next move should be toward the downside. It is possible the market could push higher based on its ongoing major (long-term) uptrend with the next major target at $60.83. However, monthly stochastics are also well above the overbought level of 80%.

Crude Oil: The spot-month contract closed $0.59 higher at $53.99. Similar to Brent, WTI is in a secondary (intermediate-term) sideways trend between the high of $55.24 (week of January 3) and low of $50.71 (week of January 9). This creates a range of $4.53. Weekly and monthly stochastics remain in overbought territory above 80%, with major (long-term) resistance at $55.61 continuing to hold.

Distillates: The spot-month contract closed 0.40ct higher at $1.6404. The secondary (intermediate-term) trend remains between resistance at the high of $1.7647 (week of January 3) and low of $1.5981 (week of January 23). The major (long-term) uptrend looks to nearing its end as the spot-month contract holds below resistance between $1.6883 and $1.8118 with monthly stochastics above the overbought level of 80%.

Gasoline: The spot-month contract closed 0.18ct lower at $1.5148. The secondary (intermediate-term) trend still looks to be sideways. RBOB gasoline will see its daily and weekly charts skewed when February comes to a close by the strong 22-cent contango between the expiring March and soon-to-be spot April. Therefore, next week's analysis will look at the cash market.

Ethanol: The spot-month contract closed 1.6cts lower at $1.504. The secondary (intermediate-term) remains sideways. Resistance is at the 4-week high of $1.612 while support is at the recent low of $1.425.

Natural Gas: The spot-month contract closed 4.7cts lower at $2.787. The secondary (intermediate-term) trend remains down. However, the spot-month contract posted a strong rally after posting a low of $2.522, a test of support at $2.521. The latter marks the 61.8% retracement level of the previous uptrend from $1.611 through the high of $3.994. Given continued bearish weekly stochastics, look for the spot-month contract to retest this support.

Propane (Conway cash price): Conway propane closed 5.75cts lower at $0.5775. The secondary (intermediate-term) downtrend continues to strengthen. Next support is pegged at $0.5281, a price that marks the 67% retracement level of the previous uptrend from $0.3775 through the high $0.9100. Below that support is at the 76.4% retracement level of $0.4726. Weekly stochastics remain bearish above the oversold level of 20% indicating the market has room to continue its sell-off.

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