Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $2.20 lower at $49.95. The market's minor (short-term) trend remains down with the spot-month contract testing minor support between $49.71 and $48.54 last week. These prices mark the 61.8% and 76.4% retracement levels of the previous minor uptrend from $46.64 through the high of $54.67. Daily stochastics are approaching the oversold level of 20% meaning Wave C (third wave) of a 3-wave minor downtrend could be nearing its end.

Crude Oil: The spot-month contract closed $2.14 lower at $47.66. The market is in Wave C (third wave) of a minor (short-term) 3-wave downtrend. With daily stochastics still bearish above the oversold level of 20% the spot-month contract could retest support at $46.91 to establish its Wave C low. This price marks the 61.8% retracement level of the previous minor uptrend from $43.76 through the high of $52.00.

Distillates: The spot-month contract closed 7.85cts lower at $1.4848. The market is in a three-wave minor (short-term) downtrend with the spot-month contract testing support between $1.5009 and $1.4711. These prices mark the 50% and 61.8% retracement levels of the previous minor uptrend from $1.3748 through the high of $1.6269. With daily stochastics approaching the oversold level of 20% the spot-month contract should retest the $1.4711 support level, with an outside change of falling to the 76.4% retracement level of $1.4343 before stochastics establish the next bullish crossover.

Gasoline: The spot-month RBOB gasoline contract closed 6.55cts lower at $1.5771. The market's secondary (intermediate-term) trend remains sideways on its weekly chart while its minor (short-term) trend is down. Daily stochastics established a bearish crossover above the overbought level of 80% at the close of Thursday, May 25 and remain bearish well above the oversold level of 20%. Next minor support is between $1.5625 and $1.5359, prices that marks the 50% and 61.8% retracement levels of the previous uptrend from $1.4500 through the high of $1.6750.

Ethanol: The spot-month contract closed 3.4cts higher at $1.554. The market's minor (short-term) uptrend looks to be nearing its end as thee nearby futures contract tests resistance at $1.561 while daily stochastics climbed above the overbought level of 80% setting the stage for a minor bearish crossover. This price marks the 50% retracement level of the previous downtrend from $1.692 through the low of $1.43. The market's secondary (intermediate-term) trend remains sideways.

Natural Gas: The spot-month contract closed 23.7cts lower at $2.999. The market remains in a secondary (intermediate-term) 3-wave downtrend with the spot-month contract falling to a new 4-week low of $2.988. Support is at the Wave A (first wave) low of $2.522, also a test of secondary retracement support at $2.521. This price marks the 61.8% retracement level of the previous secondary uptrend from $1.611 through the high of $3.994. A possible target for the Wave C (third wave) low is the 76.4% retracement level of $2.173.

Propane (Conway cash price): Conway propane closed 4.63cts lower at $0.5825. Despite the lower weekly close, cash propane's secondary (intermediate-term) trend remains up. Initial resistance is at $0.6537, a price that marks the 33% retracement level of the previous downtrend from $0.9100 through the low of $0.5275. The 50% retracement level is up at $0.7188.

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