Technically Speaking

Energy Markets: Weekly Analysis

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $1.28 higher. The spot-month contract rallied off its test of major (long-term) support at $97.70, a price that marks the 33% retracement level of the previous major uptrend from $36.20 (December 2008 low) through $128.40 (March 2012 high). Weekly stochastics saw a bullish crossover below the oversold level of 20%, indicating a turn to at least a secondary (intermediate-term) sideways trend if not an uptrend. Either way, initial resistance is now pegged at $103.25.

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Crude Oil: The spot-month contract closed $0.14 higher. The secondary (intermediate-term) trend remains down, with weekly stochastics just missing a potential bullish crossover below the oversold level of 20%. Secondary support is at the recent low of $90.43, with major (long-term) support at $89.88.

Distillates: The spot-month contract closed 2.39cts lower. The secondary (intermediate-term) trend remains down. The spot-month contract moved to a new low of $2.7010 last week, with major (long-term) support pegged near $2.6420.

Gasoline: The spot-month contract closed 9.26cts higher (see attached chart). The secondary (intermediate-term) trend turned up last week. The spot-month contract posted a bullish key reversal, setting a new low of $2.4950 before rallying beyond the previous week's high and closing higher for the week. Weekly stochastics also established a secondary bullish crossover below 20% (the initial occurring the week of August 18), confirming the pattern in the futures market. The initial upside target is $2.7460, a price that marks the 38.2% retracement level of the previous downtrend from $3.1520 through last week's low.

Natural Gas: The spot-month contract closed 2.0cts lower. The secondary (intermediate-term) trend is sideways. Support remains at the recent low of $3.723 while resistance is at the 4-week high of $4.101. Weekly stochastics remains well below the oversold level of 20%.

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