Crude Oil and Natural Gas Technical Outlook For Monday Morning

Nymex Crude Oil (CL)

Crude oil edges higher to 83.67 earlier today and at this point, intraday bias remains on the downside as long as 81.72 minor support holds. Current rise from 68.59 is still expected to continue to upper trend line resistance at 87/88 level. On the downside, break of 81.72 will argue that a short term top might be formed with bearish divergence condition in 4 hours MACD and deeper pull back could be seen before another rise.

In the bigger picture, the break of 82.0 resistance confirms that whole medium term rise from 33.2 has resumed. Nevertheless, there is no change in the view that it's a correction to fall from 147.27. Hence, we'd continue to look for reversal signal as crude oil approaches 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. However, break of 68.59 support is still needed to confirm that rise from 33.2 has completed. Otherwise, outlook will be neutral at worst even in case of deep pull back......Nymex Crude Oil Continuous Contract 4 Hours Chart.

Nymex Natural Gas (NG)

Natural gas's consolidation continues and with a short term top in place at 6.108, deeper retreat could be seen to 38.2% retracement of 4.157 to 6.108 at 5.363 first. On the upside, while some recovery might be seen, break of 6.108 high is needed to confirm that medium term rise has resumed. Otherwise, we'd expect more consolidations with risk for another fall.

In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005 and might have completed at 2.409 already. Rise from 2.409 is still in progress and should target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. On the downside, break of 4.157 support is needed to indicate that medium term rise from 2.409 has completed. Otherwise, outlook is neutral at worst even in case of deep pullback.....Nymex Natural Gas Continuous Contract 4 Hours Chart.

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Crude Oil and Natural Gas Technical Outlook For Friday Morning

Nymex Crude Oil (CL)

Crude oil is losing some upside moment with 4 hours MACD back below signal line again. Nevertheless, another rise is still in favor with 80.79 support intact and current rise from 68.59 could extend to upper trend line resistance at 87/88 level. On the downside, break of 80.79 will argue that a short term top might be formed with bearish divergence condition in 4 hours MACD and deeper pull back could be seen.

In the bigger picture, the break of 82.0 resistance confirms that whole medium term rise from 33.2 has resumed. Nevertheless, there is no change in the view that it's a correction to fall fro 147.27. Hence, we'd continue to look for reversal signal as crude oil approaches 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. However, break of 68.59 support is still needed to confirm that rise from 33.2 has completed. Otherwise, outlook will be neutral at worst even in case of deep pull back.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

Nymex Natural Gas (NG)

Natural gas rally stalled at 6.108 and retreated sharply and with 4 hours MACD back below signal line, intraday bias is turned neutral again. Nevertheless, another rise is still in favor as long as 5.615 minor support holds. Above 6.108 will bring rally resumption to 38.2% retracement of 13.694 to 2.409 at 6.72 next. On the downside, below 5.615 support, however, will indicate that rise from 4.157 has completed and in such case, deeper pull back could be seen to 4.157/5.318 support zone.

In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005 and might have completed at 2.409 already. Rise from 2.409 is still in progress and should target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. On the downside, break of 4.157 support is needed to indicate that medium term rise from 2.409 has completed. Otherwise, outlook is neutral at worst even in case of deep pullback.....Nymex Natural Gas Continuous Contract 4 Hours Chart.

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Crude Oil and Natural Gas Technical Outlook For Monday Morning

Nymex Crude Oil (CL)

As noted, recovery from 68.58 might still extend further for the moment. But still, upside is expected to be limited by 61.8% retracement at 76.87 and bring resumption of the fall from 82.0. On the downside, below 71.21 will indicate that recovery from 68.58 has completed and will flip intraday bias for this support first. Break will target 65.05 key support next. However, decisive break of 76.87 fibo resistance will argue that fall from 82.0 has completed and will turn focus back to this resistance.

In the bigger picture, at this point, crude oil is still limited by 55 days EMA (now at 74.49) and hence, we're favoring the case that medium term rise from 33.2 has completed at 82.0 with bearish divergence condition in daily MACD. Another fall is expected after finishing the current recovery from 68.58 and a break there will target 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60). Break there will confirm this bearish case and indicate that the down trend from 147.27 might be resuming for another low below 33.2. However, sustained trading above mentioned 76.87 will dampen this bearish view and argue that another high above 82.0 might be seen before crude oil tops in 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

Nymex Natural Gas (NG)

Intraday bias in natural gas remains on the upside with 5.57 minor support intact. Current rally is still expected to extend further to 38.2% retracement of 13.694 to 2.409 at 6.72 next. On the downside, below 5.57 minor support will suggest that an intraday top is formed and bring consolidations. But downside should be contained well above 4.837 support and bring rally resumption.

In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005 and might have completed at 2.409 already. Rise from 2.409 should not be completed yet and we would continue to anticipate an upside breakout of the recent range of 4.157/5.138 eventually. Above 5.318 will target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.432 support will dampen this bullish case and turn outlook mixed again.....Nymex Natural Gas Continuous Contract 4 Hours Chart.


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Crude Oil and Natural Gas Technical Outlook For Friday Morning

Nymex Crude Oil (CL)

Crude oil fall sharply to as low as 72.39 today and the development is inline with our bearish view that fall fro 82.00 is still in progress. Intraday bias remains on the downside for 61.8% retracement of 65.05 to 82 at 71.52. Sustained break there will pave the way for even deeper decline to 65.05 support next. On the upside, while some recovery might be seen, upside should be limited by 75.57 support turned resistance and bring fall resumption.

In the bigger picture, we'd continue to slightly favor the bearish case as long as 80.51 resistance holds. That is, a medium term top is formed at 82.0 on bearish divergence conditions in daily MACD as whole rise from 33.2 has completed. Break of trend line support (now at 70.60) will add more credence to this case and bring deeper fall to 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation. However, break of 80.51 will indicate that price actions from 82.0 are merely consolidations in the medium term rise only. Further break of 82.0 will bring medium term rise resumption. However, as we expect such rise to conclude inside resistance zone of 76.77/90.24 (38.2% and 50% retracement of 147.27 to 33.2), focus will remain on loss of momentum and reversal signal even in case of another rise.....Here is the charts!

Nymex Natural Gas (NG)

Natural gas retreat mildly after the rise from 4.157 was limited below 5.318 resistance. With 4 hours MACD crossed below signal line, intraday bias is turned neutral again. Some more consolidations would be seen between 4.157 and 5.318. Nevertheless, note that break of 5.318 resistance will confirm that whole rally from 2.409 has resumed and should target 61.8% projection of 2.409 to 5.318 from 4.157 at 5.955 next.

In the bigger picture, current development suggests that price actions from 5.318 are merely consolidations and should have completed at 4.517 already. Rise from 2.409, which is still in progress and will likely extend to 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.157 support will indicate dampen this bullish case and turn outlook mixed.....Here is the charts!

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Crude Oil and Natural Gas Daily Technical Outlook

Nymex Crude Oil (CL)

Crude oil turns sideway after reaching 82 level and met 100% projection of 58.32 to 75 from 65.05 at 81.72. Upside momentum is diminishing a bit but after all, further rise is still expected with 77.61 remains intact. Sustained trading above 81.72 will pave the way to next medium term fibonacci level at 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. On the downside, though, below 77.61 will indicate that a short term top is likely in place, possibly with bearish divergence conditions in 4 hours MACD and RSI. Deeper decline should then be seen to 75 resistance turned support and below.

In the bigger picture, the strong break of 75.0 resistance confirms that medium term rebound from 33.2 has resumed and further rally should be seen. Note that crude oil is now in an important resistance zone of 76.77/90.24 (38.2% and 50% retracement of 147.27 to 33.2). As we're expecting rise from 33.2 to conclude in this zone, we'll look for sign of loss of momentum in the current rise, as well as reversal sign. Nevertheless, note that break of 65.05 is needed to indicate that crude oil has topped out. Otherwise, further rise is still in favor.....here is the charts.

Nymex Natural Gas (NG)

Natural gas' retreat from 5.318 is still in progress and intraday bias remains neutral for the moment. Nevertheless, further rally is still in favor as long as 4.35 support holds and break of 5.318 will target 38.2% retracement of 13.64 to 2.409 at 6.7 next. However, considering bearish divergence conditions in 4 hours MACD, break of 4.35 will indicate that a short term top is formed and deeper pull back should then be seen instead.

In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005. The whole consolidation might have completed at 2.409 after meeting 100% projection of 15.78 to 4.593 from 13.69 at 2.50. We'll prefer the bullish case as long 55 days EMA (now at 4.119 holds) and expect the current rise from 2.409 to extend further to 61.8% retracement of 13.64 to 2.409 at 9.38 in medium term.....here is the charts.

How Low Can Natural Gas Go?

From guest analyst Jena Cartter of PCIFX, A New Horizon Of Perfection.

If one were to look up a textbook definition of a bear market, this year's natural gas market would be it. Yesterday, lead month Natural Gas futures fell to lows not seen since March of 2002, as the EIA weekly storage report showed 65 billion cubic feet (bcf) of gas was placed into storage last week. Although this figure was in line with expectations and well below the 95 bcf injected into storage this time last year, traders continued to focus on weak industrial demand as well as burdensome supplies.

Including last week's build, U.S. supplies of Gas in storage now total 3.323 trillion cubic feet (tcf), which is 18% above the 5-year average. It was a perfect storm for gas bulls this year, with industrial demand expected to be down just over 8.5% this year and summer cooling demand which never really materialized due to relatively cool summer weather in the Midwest and on the east coast. The market psychology is so bearish that traders have not been able to build a 'weather premium' into prices, despite entering the peak Atlantic hurricane season during the month of September. Should the storm season spare the Gas infrastructure in the Gulf of Mexico this year, it is possible we may see a record amount of Gas in storage going into the winter.

November 1st is considered the 'official' start of the heating season in the U.S., in which energy producers begin to draw Gas out of storing to meet heating demand. Some traders believe we may reach maximum storage capacity of just under 3.9 tcf before this occurs. The previous record was 3.545 tcf of gas in storage in 2007. Large speculators are holding a large net short position in Natural Gas futures according to the most recent Commitment of Traders report (COT). According to the COT, large non-commercial traders were net short 89,239 contracts as of August 25th. Small speculative traders were net long 49,161 contracts.

This information really highlights the trading styles of large and small speculators, as large speculators have historically been trend followers who will add to wining trades as the market moves in their direction. Small speculators like to try to pick tops and bottoms in a market, which is a difficult task for those lacking the funds to hold a position in the midst of a strong trending market.

Technical Notes
Looking at the daily chart for October Natural Gas, we notice prices accelerated to the downside once the July 13th low of 3.584 was taken out. This was the bottom of a two month long consolidation pattern that gave way in the direction of the major trend. The 14 day RSI is currently reading an extremely oversold 18.24, but has not yet shown any signs of reversing. 2.250 is seen as the next psychological support point for the October futures, with the 20 day moving average, currently near the 3.325 area, acting as resistance.

Visit the PCIFX website for more great analysis.

Crude Oil Daily Technical Outlook from Oil N' Gold

Crude oil's rise from 62.70 extends further today and breaches 70 level. At this point, intraday bias remains on the upside as long as 68.79 minor support holds. Whole rise from 58.32 is expected to continue to key cluster level at 73.38 with 100% projection of 58.32 to 68.99 from 62.7 at 73.36. On the downside, below 68.79 will indicate that an intraday top is in place and bring consolidation. But break of 62.70 support is needed to indicate that rise from 58.32 has completed. Otherwise, short term outlook will remain bullish....Complete Story

Tuesday Proves To Be Consolidation Day For Crude Oil

Crude oil closed lower due to profit taking on Tuesday as it consolidated some of the rally off last week's low. The low range close sets the stage for a steady to lower opening on Wednesday.

Despite today's setback stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 72.85 are needed to confirm that a short term low has been posted.

If August renews last week's decline, the 38% retracement level of this spring's rally crossing at 62.25 is the next downside target.

First resistance is today's high crossing at 73.38
Second resistance is this month's high crossing at 73.90

First support is last Tuesday's low crossing at 66.37
Second support is the 38% retracement level at 62.25