Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $4.53 lower at $51.37. The market moved into a secondary (intermediate-term) downtrend as the spot-month contract posted a new 13-week low (4-Week Rule) of $51.14. This was also a test of initial support at $50.99, a price that marks the 23.6% retracement level of the previous uptrend from $27.10 through the high of $59.59. With weekly stochastics still bearish the market should fall to next support at $47.96 and $46.42, the 33% and 38.2% retracement levels. A moderate contango in the nearby futures spread could limit the sell-off to no more than a 50% retracement to $42.73.

Crude Oil: The spot-month contract closed $4.84 lower at $48.49. Similar to Brent, WTI is now in a secondary (intermediate-term) downtrend as the spot-month contract posted a new 13-week low of $48.31. This was a test of initial support at $48.35, a price that marks thee 23.6% retracement level of the previous uptrend from $26.05 through the high of $55.24. The 38.2% retracement level is down at $44.09 with the 50% at $40.65. Weekly stochastics are bearish.

Distillates: The spot-month contract closed 9.00cts lower at $1.5036. The secondary (intermediate-term) trend is down as the spot-month contract moved to a new 4-week low of $1.5001. Next support is at $1.4148, a price that marks the 38.2% retracement level of the previous uptrend from $0.8487 through the high of $1.7647. Given continued bearish weekly stochastics, the market could test the 50% retracement level of $1.3067.

Gasoline: Chicago cash gasoline closed 8.80cts lower at $1.4451. This analysis has shifted to the cash market due to skewed charts following the expiration of the March and roll to the May as spot-futures with a 20-cent contango. Cash RBOB remains in a secondary (intermediate-term) consolation pattern between roughly $1.7625 and $1.3271, prices that mark the 23.6% and 50% retracement levels of the previous uptrend from $0.5025 through the high of $2.1517.

Ethanol: The spot-month contract closed 4.3cts higher at $1.520. The secondary (intermediate-term) remains sideways. Resistance is at the recent high of $1.612 while support is at the recent low of $1.425.

Natural Gas: The spot-month contract closed 18.1cts higher at $3.008. Despite the higher weekly close the secondary (intermediate-term) trend remains down. The recent minor (short-term) uptrend looks to be Wave B (second wave) of a 3-wave downtrend, with the spot-month contract testing resistance on the weekly chart at $3.084 and its daily chart at $3.012. Daily stochastics have moved above the overbought level of 80%, indicating Wave B could soon give way to Wave C.

Propane (Conway cash price): Conway propane closed 3.62cts higher at $0.5875. Despite the higher close the secondary (intermediate-term) trend remains down. However, cash propane continues to hold above support at $0.5281, a price that marks the 67% retracement level of the previous uptrend from $0.3775 through the high $0.9100. The market is in position to post a minor (short-term) uptrend, amounting to Wave B (second wave) of a 3-wave downtrend. Initial minor resistance is pegged at $0.6632, the 33% retracement level of Wave A.

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