Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $0.33 lower at $63.40. The market continues to consolidate below its high of $64.65, in position to begin a secondary (intermediate-term) downtrend. Confirmation of a secondary downtrend would be a move to a new 4-week low below $61.08. When this happens the initial downside target becomes $55.79, the 23.6% retracement level of the previous uptrend from $27.10. Weekly stochastics are bearish and still indicating a sharply overbought situation above 90%.

Crude Oil: The spot-month contract closed $1.00 lower at $57.36. Similar to Brent crude, WTI looks to be in position to establish a secondary (intermediate-term) downtrend with a move to a new 4-week low below $54.81. Resistance is at the recently posted new high of $59.05. If or when a downtrend is established the initial target is $51.25, a price that marks the 23.6% retracement level of the previous uptrend from $26.05. Weekly stochastics are bearish, still indicating a sharply overbought situation above 90%.

Distillates: The spot-month contract closed 1.25cts lower at $1.9288. Despite last week's late rally the market still looks to be in a secondary (intermediate-term) downtrend based on the previous week's bearish reversal. Initial support is at the new 4-week low of $1.8597 with an initial target of $1.6993. The latter marks the 23.6% retracement level of the previous uptrend from $0.8487 through the high of $1.9620. Weekly stochastics remain bearish, still indicating a sharply overbought situation above 90%.

Gasoline: RBOB gasoline futures market closed 2.50cts lower at $1.7166. The secondary (intermediate-term) trend looks to be sideways with resistance at the 4-week high of $1.8326. Support at the 4-week low is now $1.6600.

Ethanol: The spot-month contract closed 2.1cts lower at $1.329. The market remains in a secondary (intermediate-term) downtrend on its weekly chart. Based on potential retracements, and that the nearby futures contract posted a new 4-week low last week, an extension of the downtrend to $1.270 looks possible. Weekly stochastics are near 10%, indicating a sharply oversold situation.

Natural Gas: The spot-month contract closed 28.9cts lower at $2.772. While it could be argued that the market's secondary (intermediate-term) trend turned down with last week's new 4-week low of $2.747, natural gas still looks to be in a volatile sideways trend until it takes out its previous spike low of $2.723. Weekly stochastics also turned bearish last week, holding well above the oversold level of 20% indicating more downside momentum is possible.

Propane (Conway cash price): Conway propane closed 2.25cts lower at $0.9150. The market is in a secondary (intermediate-term) downtrend. Initial support is at $0.8723, a price that marks the 23.6% retracement level of the previous uptrend from $0.5275 through the high of $0.9800. Weekly stochastics are bearish but still near the overbought level of 80% indicating there remains considerable room to extend the downtrend.

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