Technically Speaking

Monthly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed at $63.50, down $2.07 on the monthly chart. While the major (long-term) trend remains up, a secondary (intermediate-term) downtrend could take the spot-month contract back to a test of support at $57.41. This price marks the 50% retracement level of the initial rally from the January 2015 low of $45.19 through the April 2015 high of $69.63.

Crude Oil: The spot-month contract closed at $59.34, down $0.96 on the monthly chart. The major (long-term) trend remains up with the spot-month contract testing resistance between $59.21 and $66.27. These prices mark the 23.6% and 33% retracement levels of the previous downtrend from $114.83 (May 2011 high) through $42.03 (low from March 2015). Initial support is pegged at $55.74, the 33% retracement level of the rally from $42.03 (March 2015 low) through $62.58 (May 2015 high). Monthly stochastics remain bullish following the crossover below the oversold level of 20% posted at the end of April.

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Distillates: The spot-month contract closed at $1.8866, down 6.87cts on the monthly chart. The major (long-term) trend looks to have turned sideways with resistance at the May high of $2.0572 and support at the January 2015 low of $1.5890. Monthly stochastics are neutral-to-bullish, below the oversold level of 20%.

Gasoline: The spot-month contract closed at $2.0896, up 0.38ct on the monthly chart. The major (long-term) trend of the market remains up. However, the spot-month contract continues to test resistance at $2.0869, the 38.2% retracement level of the previous downtrend from $3.4789 (April 2011 high) through $1.2265 (January 2015 low). The continued strengthening of the backwardation in the market's forward curve would suggest an extended rally to the 50% retracement level of $2.3527.

Ethanol: The spot-month contract closed at $1.612, up 7.9cts on the monthly chart. The key to the ethanol market could be monthly stochastics, with the last major (long-term) signal a bullish crossover below the oversold level of 20% at the end of April. This continues to indicate the major trend is up. If so initial resistance is pegged at $1.712, a price that marks the 23.6% retracement level of the previous downtrend from $3.07 through the low of $1.292.

Natural Gas: The spot-month contract closed at $2.825, up 18.3cts on the monthly chart. The major (long-term) trend remains up with an initial upside target of $3.216, the 23.6% retracement level of the previous downtrend from $5.72 through the low of $2.443. The 33% retracement level is up at $3.534.

Propane (Conway cash price): Conway propane closed at $0.3500, down 3.00cts on its monthly chart. While the market posted a new low of $0.2675 during June, monthly stochastics continue to indicate a potential major (long-term) uptrend is in place. Initial resistance is calculated at $0.5542, a price that marks the 23.6% retracement level of the previous downtrend from $1.4825 through the June 2015 low.

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