Technically Speaking

Monthly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed at $66.87, up $3.30 on the monthly chart. The market remains in a major (long-term) uptrend with the spot-month contract closing above resistance at $65.80. This price marks the 38.2% retracement level of the previous downtrend from $128.40 through the low of $27.10. The 50% retracement level is up at $77.75. However, monthly stochastics are already above 90% indicating a sharply overbought situation. The uptrend continues to be supported by bullish fundamentals indicated by the backwardation (inverse) in the market's forward curve.

Crude Oil: The spot-month contract closed at $60.42, up $3.02 on the monthly chart. The market remains in a major (long-term) uptrend with the spot-month contract closing above resistance at $59.96. This price marks the 38.2% retracement level of the previous downtrend from $114.83 through the low of $26.05. Next resistance is up at the 50% retracement level of $70.44, though monthly stochastics are already above the overbought level of 80%.

Distillates: The spot-month contract closed at $2.0681, up 17.54cts on the monthly chart. The market remains in a major (long-term) uptrend with the spot-month contract testing resistance at $2.1094. This price marks the 50% retracement level of the previous downtrend from $3.3700 through the low of $0.8487. Monthly stochastics are above 90%, indicating a sharply overbought situation, and putting market in position for a turn to a downtrend.

Gasoline: The spot-month contract closed at $1.7958, up 6.74 cents on the monthly chart. The major (long-term) trend of the futures market remains up with resistance still pegged at $1.8836. This price marks the 38.2% retracement level of the previous downtrend from $3.4789 through the low of $0.8975.

Ethanol: The spot-month contract closed at $1.320, down 2.3cts on the monthly chart. The major (long-term) trend remains sideways-to-down. The nearby futures contract posted a new low of $1.251 during December before rallying, looking like a possible spike reversal on the monthly chart.

Natural Gas: The spot-month contract closed at $2.953, down 7.2cts on the monthly chart. The market looks to be in a wide-ranging major (long-term) sideways trend with support still at $2.521 and resistance at the 4-month high of $3.231. Monthly stochastics remain neutral-to-bearish.

Propane (Conway cash price): Conway propane closed at $0.9275, up 1.25ct on its monthly chart. Cash propane's major (long-term) trend looks to be turning sideways below resistance at $1.0126. This price marks the 61.8% retracement level of the major downtrend from $1.4826 (December 2013) through the low of $0.2525 (January 2016). Monthly stochastics are bullish but above the overbought level of 80%, putting the study in position for a possible bearish crossover.

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