Technical Analysis Archives - Page 27 of 48

November natural gas met support at $2.85, the intermediate (1.382) target of the wave $3.036 – 2.908 – 3.026. This wave is now in position to extend to its $2.81 larger than (1.618) target. This is an important objective because it is also the smaller than (0.618) target of the waves $3.214 – 2.827 – 3.036 and $3.561 – 2.886 – 3.214. Settling below $2.81 would open the way for a more negative near-term outlook.

Due to the confluence and importance of $2.81, once this target is met there is a reasonable chance another test of resistance will take place before prices fall much lower. Initial resistance is $2.89 and then $2.92. A normal correction should hold $2.92 because this is the 38 percent retracement of the decline from $3.036.

Key resistance for the near-term is $2.97, the 62 percent retracement. A close above this would call for another attempt at $3.02, the 50 percent retracement of the decline from $3.214 and the 50-day moving average.

At this point, aside from confluent support at $3.81, there is very little technical evidence that indicates the move down will end soon. This may change as withdraw season approaches and weather gets cooler. However, for now, odds have shifted back in favor of a continued decline to challenge the continuation charts $2.753 swing low.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI crude oil met support at $51.3 before stalling at $51.21. The move down has been choppy and forms a bullish wedge on the $0.35 Kase Bar chart. The move up from $51.21 was aggressive and is poised to break higher out of the wedge and challenge key resistance at $52.5 again tomorrow. A close above this would open the way for $53.0, $53.5, and ultimately $54.2, the next major objective.

That said, prices pulled back a bit this afternoon, therefore a test of $51.4 might take place first, but support is expected to hold. A move below $51.4 before $52.5 is met would call for $51.1 and possibly $50.3. The near-term outlook becomes negative again upon a close below $50.3, the 62 percent retracement of the move up from $49.1 and the 1.618 projection of the wave $52.37 – 51.21 – 52.17.

This is a brief analysis for the next day or so. Our weekly Crude Oil Commentary and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Many near-term factors are positive for WTI crude oil. Tuesday’s move up confirmed a daily morning star, today’s move settled above the $51.22 swing high, and last week’s $50.5 midpoint has been overcome. These factors call for the move up to continue, but caution is warranted.

WTI met and held the exact 62 percent retracement of the decline from $58.26 to $49.1 when it rose to $51.42 today. This crucial level held again when prices rose to $51.37 ahead of the close.

WTI Crude Oil Kase Bars — WTI Crude Oil $0.35 Kase Bars

Therefore, prices will probably test support at $50.6 before challenging $51.4 again. Key support is $50.1, Tuesday’s midpoint and the 62 percent retracement of the rise from $49.1 to $51.42. A close below this would indicate the move up has failed and that the near-term has readopted a negative outlook.

Should prices settle above $51.4, look for a $52.1 and more likely $52.5 to be met before the end of the week.

November natural gas overcame $2.94 but could not settle above this highly confluent threshold. The pullback from $2.962 formed a long upper shadow on the daily chart. Patterns like this that have formed during the past few weeks have been early warnings that the corrective moves up have stalled. This is probably the case again, so odds favor a test of at least $2.86 tomorrow. A close below $2.86 would open the way for $2.82 and more likely $2.79. The key objective is $2.75, which is in line with the continuation chart’s $2.753 swing low.

Natural Gas Kase Bars — Natural Gas $0.035 Kase Bars

That said, support at $2.88, the 62 percent retracement of the move up from $2.827, held this afternoon. Therefore, there is an outside chance that the move up will continue. A move above $2.93 in early trading would open the way for $2.97, which is now the smaller than (0.618) projection of the wave $2.827 – 2.962 – 2.884. This is also near the 38 percent retracement of the decline from $3.214 and the 62 percent retracement from $3.089. A close above $2.97 would call for $3.02, the equal to (1.00) projection, 50 percent retracement from $3.214, and 50-day moving average.

November natural gas’ initial rise to $2.977 overcame Monday’s $2.967 midpoint. However, prices could not close above that level and the subsequent decline has already retraced 50 percent of the move up from $2.88. The candlestick’s long upper shadow indicates today’s move up was most likely a failed attempt to overcome resistance. Therefore, odds still favor a decline. A move below $2.90 early tomorrow would open the way for $2.85.

That said, a bullish daily KaseCD divergence and rising Stochastic %K-line indicate consolidation and possibly another attempt at $2.98 and higher might take place. $3.02 is most important for the near-term because it is split around the 38 percent retracement of the decline from $3.214, the 62 percent retracement from $3.089 and the 50-day moving average.

To confirm the move down is over (for now), prices must overcome the $3.089 swing high, which is also the 62 percent retracement of the decline from $3.214. This would, in turn, take out the wave $3.214 – 2.974 – 3.089 that projects to $2.85 and lower.

With all factors considered, the market still has a neutral-to-negative near-term outlook. Until external factors can support a sustained recovery, the decline will most likely continue to grind its way lower.

November WTI crude oil met the 62 percent retracement of November’s decline from the 2017 $58.37 swing high to $42.8 at $52.42 when it rose to $52.43 early this morning. This is major resistance because it is also a confluent wave projection. Settling above $52.6, the upper end of the confluence range around $52.42, would be bullish for the long-term.

For now, the long-term outlook remains positive. However, normally, when such an important target is met a significant correction will take place before that objective is overcome on a sustained closing basis. Today’s pullback from $52.42 formed a bearish Harami line and star, which is a reversal pattern. These patterns are not highly reliable, but the overbought daily Stochastic, RSI and nearly overbought KasePO indicate a pullback should take place soon.

This afternoon’s move up after the API Petroleum Inventories report was released indicates $52.6 might be tested early tomorrow. However, we expect this level to hold and for the downward correction to extend to at least $51.4 tomorrow, which is in line with Monday’s $51.45 midpoint. A close below this would open the way for $51.0 and possibly lower.

At this point, even a normal correction of the move up from the $46.14 swing low could drop prices to $50.0 should the corrective pullback extend as expected.

October natural gas’ settle below Monday’s $3.098 midpoint opens the way for a larger correction to at least $3.06. The move down is most likely corrective. However, for the move up to continue over the next few days $3.06 needs to hold. A close below this would not doom the move up but rather indicate that a deeper test of support and possible consolidation will begin to take place.

Initial resistance is $3.13, the 62 percent retracement of the decline from $3.166, so far. $3.17 is the key threshold for the near-term. A close above this would indicate the corrective pullback is over and that the move up will extend to $3.23. This is currently the most confluent objective making it another potential stalling point.

WTI crude oil has formed strong resistance between $50.82 and $50.88. This level has been challenged three times over the past few days and held. One might argue that this is a triple top. However, the decline from $50.88 has been extremely shallow and choppy indicating it is most likely corrective.

This afternoon’s move up from the $49.73 swing low calls for another attempt at $50.9 early tomorrow. A move above this would call for $51.3, a confluent wave projection that sits just above the 200-day moving average. The confluence and importance of $51.3 make it another potential stalling point. A close over $51.3 would call for $51.7 and $52.5.

That said, the daily Stochastic is overbought and the move up seems to be exhausted. Should prices fall below $49.6 before rising above $50.9, look for an extended correction to $48.9 and possibly lower before the move up continues to $51.3.

October natural gas settled above $3.03 and fulfilled the $3.06 target. The next objective is $3.09, the equal to (1.00) target of the wave $2.88 – 3.088 – 2.885. The key objective is $3.12, the smaller than (0.618) target of the wave $2.799 – 3.042 – 2.88. This has been strong resistance all summer for October and the continuation chart, making it a decision point for a larger scale move up and sustained recovery.

A sustained close above $3.12 would open the way for $3.17 and $3.22. Above $3.12 the $3.22 objective is most important because it is the 50 percent retracement of the decline from $3.619. This is also a confluent projection for the aforementioned waves up from $2.799 and $2.88.

Daily momentum does not show any signs that the move up will stall. However, a few intraday charts are setup for divergence or are overbought. Therefore, given $3.12 has been such strong resistance a pullback might take place before it is overcome.

At this point, any move down will most likely be corrective. Tomorrow, support at $3.03 should hold. Key support is $2.96, which is the 50-day moving average and 62 percent retracement of the move up from $2.88 so far.

WTI crude oil still looks weaker than Brent and products after forming a star today and settling below Friday’s $48.28 midpoint. However, prices are poised to break higher out of a bullish ascending triangle and should meet the smaller than (0.618) target of the wave $47.0 – 48.44 – 47.84 at $48.7. A close above this would clear the way for the equal to (1.00) target at $49.3. This is an important objective because it is also in line with the smaller than target of the wave $45.58 – 49.42 – 47.0.

October 2017 WTI Crude Oil Kase Bar Chart

There is an outside chance the formation that makes up the ascending wedge is alternatively a double top at $48.44. To confirm the pattern prices would have to hold $48.44 and settle below the $47.84 swing low. This would then call for a test of the double top’s $47.2 target. Settling below $47.2 would call for the decline to extend to $46.8 and $46.4. The $46.4 level is most important because it is the smaller than target of the larger scale wave $50.51 – 45.58 – 49.42.

Natural Gas Short-Term Forecast – October 18, 2017

Tag: Technical Analysis