Technically Speaking

Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $4.20 higher at $52.99. Weekly stochastics continue to show the secondary (intermediate-term) trend has turned sideways to up following the bullish crossover the week of January 12. The spot-month futures contract has posted a bullish outside week last week, extending its rally off the recent low of $45.19. Next resistance, and clearer signal of an early uptrend, is at the 4-week high of $56.30.

Crude Oil: The spot-month contract closed $2.65 higher at $48.24. As with Brent crude, weekly stochastics for WTI indicate the secondary (intermediate-term) trend is sideways to up following a bullish crossover below the oversold level of 20% the week of January 12. The spot-month contract has not established a bullish breakout yet, but could with a move above the 4-week high of $52.73. Friday's CFTC Commitments of Traders report showed noncommercial interests increasing their net-short futures position (through Tuesday, January 27), though short-covering likely occurred during Friday's late rally.

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Distillates: The spot-month contract closed 3.96cts higher at $1.6863. The spot-month contract posted a bullish outside week, moving the market one step closer to establishing a secondary (intermediate-term) uptrend. A clearer signal would be a move above the 4-week high now pegged at $1.7996. Weekly stochastics continue to indicate the secondary trend has turned sideways at least given the bullish crossover below the oversold level of 20% the week of January 12. Friday's CFTC Commitments of Traders report showed noncommercial interests increasing their net-long futures position by 6,952 contracts.

Gasoline: The spot-month contract closed 6.73cts higher at $1.3479. The spot-month contract looks to be in step with its 5-year seasonal index that shows a normal low in mid-January leading to an uptrend lasting through April. Weekly stochastics continues to indicate a possible secondary (intermediate-term) uptrend following the bullish crossover below the oversold level of 20% the week of January 12. A bullish breakout in the futures would occur when the spot-month contract moves above the 4-week high now at last week's high of $1.4475.

Ethanol: The spot-month contract closed 6.30cts lower at $1.3670. While the market remains in a secondary (intermediate-term) downtrend, the spot-month contract continues to consolidate above the recent low of $1.2920. Weekly stochastics are holding below the oversold level of 20%, leaving open the possibility of a bullish crossover in the near future.

Natural Gas: The spot-month contract closed 29.5cts lower at $2.691. The secondary (intermediate-term) trend has turned down again after the spot-month contract moved below the previous low of $2.766, erasing the bullish key reversal posted the week of January 12. Weekly stochastics remain bearish, but are below the oversold level of 20% setting up a possible bullish crossover in the weeks to come.

Propane (Conway cash price): Conway propane closed 2.13cts lower at $0.4487. The secondary (intermediate-term) trend remains sideways as cash propane continues to consolidate above its recent low of $0.3775 and below $0.5400, the high from the week of December 15. Initial resistance is at last week's high, now the 4-week high, of $0.4850.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, January 27.

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