Technically Speaking

Monthly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed at $52.38, down $0.27 on the monthly chart. While the last major turn signal on the market's monthly chart was bearish, indicating the major (long-term) trend is down, Brent crude continues to consolidate between support at $42.73 and resistance at $58.37. If the market sees a bullish breakout of this range it should lead to a test of resistance up at $77.75. A bearish breakout should lead to a test of the major low at $27.10 (January 2016).

Crude Oil: The spot-month contract closed at $47.23, down $2.94 on the monthly chart. The major (long-term) trend remains down. The recent rally resulted in a test of resistance at $50.20, a price that marks the 61.8% retracement level of the initial sell-off from $55.41 (January 2017) through the low of $46.04 (June 2017). The next wave down could result in a test of support between $40.65 and $37.20.

Distillates: The spot-month contract closed at $1.7575, up 10.56cts on the monthly chart. The market looks to have returned to its previous major (long-term) uptrend as it posted a new 4-month high of $1.7635. Resistance could still be found at $1.8118 as monthly stochastics again approach the overbought level of 80%.

Gasoline: The Chicago cash RBOB market closed at $1.9242, up 20.76cts on its monthly chart. The market remains in a major (long-term) sideways-to-up trend. Chicago cash RBOB posted a new 4-month high of $1.9577 as the futures market skyrocketed following Hurricane Harvey. Support is at the 4-month low of $1.4378.

Ethanol: The spot-month contract closed at $1.547, down 0.7ct on the monthly chart. The major (long-term) trend remains sideways. Resistance is 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 $3.040, up 24.6cts on the monthly chart. Natural gas remains in a 3-wave downtrend with the February 2017 low of $2.522 the bottom of Wave A (first wave). The May high of $3.431 was not only a test of resistance at $3.432, the 61.8% retracement of Wave A, but also the peak of Wave B. Wave C would now be expected to move below the Wave A low. Monthly stochastics remain bearish.

Propane (Conway cash price): Conway propane closed at $0.7388, up 3.88cts on its monthly chart. The secondary (intermediate-term) uptrend looks to be Wave B (second wave) of the ongoing major (long-term) 3-wave downtrend that began with the bearish reversal posted in February 2017. Cash propane is testing resistance at $0.7846, a price that marks the 67% retracement level of Wave A. Wave C has a target price of $0.4714.

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