Technical Analysis Archives - Page 48 of 60

By Dean Rogers

Natural gas is still looking for support from weather, but until cold temperatures arrive in key areas of the U.S. prices should continue to grind lower. The negative bias is confirmed by KaseX’s filtered short signal (purple diamonds).

January futures met an important target at $2.15 on Wednesday. This was the 0.618 projection for the wave $2.347 – 2.175 – 2.259. A close below $2.15 would call for key support at $2.10, the 1.00 projection.

The importance of $2.15 indicates a correction might take place first, but look for resistance at $2.22 to hold. A close over $2.22 would call for $2.26 and possibly $2.30. A move higher than $2.30 is doubtful without support from weather.

This is a brief natural gas forecast for the next day or so. Our weekly Natural Gas Commentary is a much more detailed and thorough analysis. If you are interested in learning more, please sign up for a complimentary four week trial.

By Dean Rogers

For the past few weeks gasoline futures rose in a dramatic fashion and lent some support to underlying WTI and Brent futures prices. However, a few bearish technical factors indicate the move up is probably complete and that a major test of support is now underway.

January gasoline futures stalled at the crucial 62 percent retracement of the decline from $1.4516 to $1.1962. In addition, Monday’s $1.3069 settle completed an evening star and hammer candlestick pattern and a moderately bearish overbought signal on KaseX (gray arrow). All three factors indicate the decline should continue.

The pullback has retraced 38 percent of the move up from $1.1962 to $1.3731 so far. A close below $1.2972 will confirm the evening star and hammer and call for at least $1.285 and very likely $1.264, the 50 and 62 percent retracements, respectively. These are also confluent intraday wave projections.

From a technical standpoint, the move down is corrective of the move up until there is a close below $1.264. Odds for a move of this magnitude over the next week or so are 65 percent.

Look for resistance at $1.33 to hold. A close over $1.354 would be positive and open the way for $1.412 and higher.

This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary is a much more detailed and thorough energy price forecast. If you are interested, please sign up for a complimentary four week trial.

By Dean Rogers

Natural gas’s upward correction has been held at bay as the market seeks frigid temperatures to support a move higher. January is settling into the familiar range between approximately $2.26 and $2.39 that December oscillated in before it finally broke lower. This is likely where prices will remain for the rest of the week due to the Thanksgiving holiday.

The move up is corrective, and that point was verified on Wednesday when prices initially broke higher out of an intraday coil and subsequently stalled at $2.347 before overcoming the $2.351 swing high.

Meeting the 0.618 projection for the wave $2.229 – 2.351 – 2.258 indicates January could still test $2.39, which is near the 1.00 projection and the 38 percent retracement of the decline from $2.60 to $2.229, as long as the $2.258 swing low holds. However, without support from external factors (cold temperatures) the market will be hard pressed to rise above $2.39 and extend to the next confluence point of $2.48.

Odds favor the decline and a test of $2.26 by the end of this week. This is a tough call right now because the market is sitting on major support, and external factors could turn this market higher in a heartbeat. Therefore, provided $2.26 can hold, there is still a reasonable chance the upward correction will extend to $2.39, but at this point we would not hold our breath.

Happy Thanksgiving to all!

By Dean Rogers

As we stated last week, the natural gas call is extremely tight right now. The market can only tell us what it knows about itself, and right now the market is not sure what it knows.

The move up from $2.188 stalled at $2.398 on November 6, and since then prices have worked their way lower in an extremely choppy manner to test major support at $2.25. This level held on today’s close, so technically prices are still trading within the range.

The market is waiting on cold weather to push it higher, but today’s price action did not help short-term bulls. It will eventually get cold and prices will rise, but today’s decline to $2.25 puts odds slightly in favor (around 60 percent) of a decline to test least $2.20 and possibly $2.12 over the next few days.

That said, $2.25 is an extremely important and highly confluent wave projection and retracement that has been tested a few times and has held on a closing basis since the move up from $2.188 began on October 30. Therefore, caution is warranted, and given the circumstances, we would not be at all surprised to see $2.25 continue to hold.

From a trading strategy standpoint, this is a time that we would normally recommend sitting on the sidelines for a bit while waiting for a more concise direction and break out of the $2.25 to $2.37 range. Upon a close below $2.25 or above $2.37, a trade may be taken upon a confirming long or short signal from indicators like Kase StatWare or KaseX. Shorter bar lengths are also recommended because they will help limit risk and should be used to pinpoint entries and exits and determine stop levels until there is a close either below $2.12 or above $2.48. At that point a clear long-term trend will have been established and trades may then be scaled to longer bar lengths with wider stops.

This is a brief natural gas forecast ahead of tomorrow’s EIA report. Our weekly Natural Gas Commentary is a much more detailed and thorough analysis. If you are interested in learning more, please sign up for a complimentary four week trial.

By Dean Rogers

WTI stalled near $48.0 as we expected in our weekly Crude Oil Commentary and the sustained close below $44.7 calls for a test of key support at $43.2. This is a confluence area that is near the 0.618 projection of the wave $51.42 – 42.58 – 48.36. A close below $43.2 would confirm the negative outlook and open the way for a continued decline.

The Kase Easy Entry System (KEES) confirms the negative bias. Today’s pink dot indicates that the majority of momentum indicators are permissioned short on the daily chart and that the synthetic three-day filter is also permissioned short.

That said, the shorter intraday bar lengths are showing that the decline from $48.36 is a bit overextended, exhausted, and due for a correction. The correction will most likely take place once $43.2 is met. First resistance is $44.5. Key resistance is $45.4, the 38 percent retracement from $48.36 to $43.64. Both levels are in line with the opening prices of the last few days. A close over $45.4 would call for an extended upward correction and a likely trading range for the near-term.

This is a brief analysis and crude oil forecast for the next day or so. Our weekly Crude Oil Commentary is a much more detailed and thorough energy price forecast. If you are interested, please sign up for a complimentary four week trial.

By Cynthia Kase

The market’s been watching the impact of El Niño since June. Then the National Oceanic and Atmospheric Administration said there was a 90 percent chance the baby would stick around all summer, and maybe even into 2016. Sugar has been rising since mid-August, as El Niño persisted, but turned choppy in October only to break to 15.53¢ as of the 3^rd.

Apparently Niño’s wet weather is delaying the sugar harvest and fears have grown about undersupply. The technicals have been positive but slammed up against resistance at 15.53¢. So while it’s too soon to say if 15.53¢ is “it”, there is likely more downside.

15.53¢ is important for a few reasons. It failed by 5 points to reach the 21 percent retracement of the entire move down from 36.08¢ to 10.13¢ on the continuation chart. Second, the Stochastic and RSI momentum indicators were set up for bearish divergences at that price. Most important, 15.53¢ was a confluent target, as shown in the chart. That price is just 0.01 points shy of March’s “trend terminus” target (12.55^3/11.28^2) for the first wave up from 11.28¢.

First support was met on Wednesday at 14.64¢. Next is 14.40¢, just 7 points below Thursday’s low. This is the 21 percent retracement for continuation’s entire move up, and a confluent retracement for the intermediate swings on both charts. It is also the 0.62 projection for the wave 15.53 – 14.47 – 15.05.

The key question is whether the decline, which only reached 15.47¢ versus 15.40¢ support, is over. The fact that the bounce up from 15.47¢ formed an ABC pattern where C is the 1.62 extension of A, exactly, and that prices then declined to 14.59¢, that is, below the prior 14.64¢ swing, means probably not.

14.40¢ remains to be broken, so a continued decline is not a sure thing, but 14¢, the major threshold, is likely.

The open and midpoints of candlesticks constitute support and resistance. Last week’s midpoint was 14.37¢ and the open for the week ending October 9, the last large up week prior, was 13.92¢. There’s also an important swing at 13.94¢. So as long as this holds (the lower end of a 14¢ +/- 0.1¢ range), odds are open for the bull market to resume.

Initial resistance is 15.40¢. The decline isn’t dead unless this is overcome. Above this, a highly confluent 15.95¢, the last remaining target (the Phi^3 corrective projection) for the first wave up, and occurs as a target 10 times for the 10 waves up from mid-October’s 13.69¢ swing low. The highest price to which the March chart projects which has a moderate probability is 18¢, the 0.62 projection of the entire move up.

Send questions to askkase@kaseco.com, and click the link learn more about Cynthia Kase’s latest video series, Kase on Technical Analysis.

By Dean Rogers

Natural gas cautiously rose to $2.317 to fulfill the smaller than (0.618) projection for the wave $2.188 – 2.336 – 2.231. Typically, a move to $2.38 would now be expected because waves that meet the 0.618 projection normally extend to at least the equal to (1.00) projection. The pullback to $2.255 is a bit worrisome, but until the $2.231 swing low is taken out odds favor of a move to $2.38. This is a crucial target because $2.38 is the 38 percent retracement from $2.78 to $2.188 and makes a connection to $2.48 where last week’s gap would be filled.

KaseX warned that the decline from $2.317 would extend (yellow triangle), and as stated, support at $2.25 is already being challenged. A move below $2.231 would take out the wave up from $2.188 and its projections to $2.38 and higher. This would in turn shift odds back in favor of a decline to $2.11 to fulfill the requirements of the textbook five wave pattern down from $3.391 as discussed last week.

By Dean Rogers

December WTI’s wave $39.22 – 50.89 – 44.31, which met its 0.618 projection at $51.42, has been taken out by the $43.64 swing low. Consequently a technical failure of the move up has taken place and odds have shifted in favor of a continued decline. Look for $43.0 tomorrow and very likely $42.5 over the next few days. A close below $42.5 would confirm the negative outlook and technical failure. There is an outside chance that the support trend line will hold. Look for resistance at $45.4 and $46.5.

By Dean Rogers

This is the time of year when everyone is looking for a bottom and pre-winter rally for natural gas. The logic and seasonal timing make sense, but picking bottoms is a dangerous game. Those that successfully time the bottom are more lucky than good. The best that most mere mortals can hope for is to be prepared for the turn so that they can react in an effective manner that fits their goals, strategy, and risk appetite.

This is why it is important to have a forecast and directional opinion (and yes, sideways is a direction) about the market in addition to a set of reliable indicators like Kase StatWare or KaseX to time entries and exits. The forecast is the framework for the market that lets you know where key support and resistance are and when you can expect correction and potential trend reversal. Indicators tell you when to get in, where to place stops, and when to get out.

For instance, $2.40 was major support for November natural gas. This was a highly confluent target, and we had discussed this level as a potential stalling point for many weeks (even months) leading up to the decline to $2.403 on October 2. However, the subsequent move up was shallow, choppy, and corrective. Long trades could have been taken on shorter bar lengths during the corrective move up, but in our detailed weekly forecasts and mid-week blog updates we anticipated another decline and test of $2.40 because the market was struggling to overcome key resistance levels at $2.48 and $2.59.

November fell to $2.41 on October 16 and started to bounce again. The move stalled at $2.50 on Tuesday, October 20 and prices fell to new lows for November and the winter contracts on Wednesday, October 21.

$2.40 has held so far on a closing basis, but a sustained close below this level will open the way for at least $2.33, the 1.00 projection for the wave $2.578 – 2.41 – 2.499 and very likely $2.27. The latter is a confluent objective for the waves down from $2.859, $2.72, and $2.578 making it the next potential point at which a bottom could be made.

Most technical factors are negative and there is little evidence that the decline is going to stall. However, the importance of support at $2.33 and especially $2.27 indicate that we should be prepared for at least another correction and a potential bottom soon. Keep a close eye on your indicators to tell you when to time your entries and watch for closes above key resistance levels to confirm the move down has ended.

For now, initial resistance is $2.45 and key resistance, for the near term, is $2.50.

By Dean Rogers

December WTI’s wave $39.22 – 50.89 – 44.31 met its 0.618 projection at $51.42. This was positive, especially due to the break higher out of the bullish pennant formation. We anticipated the pullback from $51.42, but so far it has been stronger than expected and is poised to test major support levels at $46.0 and $44.3.

Kase’s studies show that waves that meet the 0.618 projection extend to the 1.00 projection 80 percent of the time. This would have pushed prices to $56.0. However, the pullback from $51.42 has been strong and closed below $47.0 support on Monday. Therefore, this may be 20 percent of the time that a wave fails to meet its 1.00 projection.

First support is $46.0, and a close below this would open the way for $44.31. This is the swing low of the wave up from $39.22 and is in line with the 0.618 projection of the wave down from $51.42. Taking out $44.31 would result in a technical failure of the move up and call an extremely bearish outlook for foreseeable future.

Look for immediate resistance at $46.9, $47.6, and then $48.4.

Natural Gas Forecast: January Poised to Test $2.10

Tag: Technical Analysis