Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $1.94 lower at $68.58. The market looks to have moved into a secondary (intermediate-term) downtrend with its lower weekly close establishing a bearish crossover by stochastics above the overbought level of 80%. Next confirmation of this change in trend would be a new 4-week low below $67.44.

Crude Oil: The spot-month contract closed $0.69 lower at $65.45. The lower weekly close established a bearish crossover by stochastics well above the overbought level of 80%. This could be an initial signal that the market's secondary (intermediate-term) trend has turned down. Confirmation of this would be a new 4-week low below $61.34. Resistance is at the recent high of $66.66.

Distillates: The spot-month contract closed 8.25cts lower at $2.0535. The market's secondary (intermediate-term) trend looks to have turned down. Last week's price action finished a 2-week reversal pattern and established a bearish crossover by weekly stochastics above the overbought level of 80%. Confirmation of this change in trend would be a move to a new 4-week low below $2.0375. When this happens, initial support is at $1.8376, a price that marks the 23.6% retracement level of the previous uptrend from $0.8487 through the recent high of $2.1431.

Gasoline: RBOB gasoline futures market closed 6.57cts lower at $1.8720. The market's secondary (intermediate-term) trend turned down as the spot-month contract established a bearish outside week leading to a crossover by weekly stochastics above the overbought level of 80%. Keep in mind that the weekly chart could be skewed by the roll from the expiring February to March as spot-month contract. The key will be if follow-through selling is seen this coming week.

Ethanol: The spot-month contract closed 10.2cts higher at $1.463. The market remains in a secondary (intermediate-term) uptrend with next resistance at $1.506. This price marks the 50% retracement level of the previous downtrend from $1.76 through the low of $1.251. Weekly stochastics remain bullish below the overbought level of 80%.

Natural Gas: The spot-month contract closed 65.9cts lower at $2.846. The market remains extremely volatile following last week's wide bearish outside range. The spot-month contract is testing support at $2.803, with next support down at $2.521.

Propane (Conway cash price): Conway propane closed 0.87ct lower at $0.7788. Cash propane remains in a secondary (intermediate-term) 3-wave downtrend, with this sell-off Wave C (third wave). Propane tested support at $0.7537 last week with its low of $0.7575. Weekly stochastics remain bearish above the overbought level of 20%, meaning the market could extend its downtrend to next support at $0.7004.

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