For the Week of May 28, 2013 The GBE Trade Spotlight advisory service applies the GBE trading methodology (buying or selling commodity contracts based on breakouts of chart formations and technical indicators) to identify one to two trade setups per week.Highlighting This Week’s Potential Breakouts:
Let’s take a look at two energy market sector markets as we enter the “Summer Driving Season”.
July 2013 Crude Oil
Based on Cash charts, the Crude Oil contract tends to sharply drop in June, slightly retrace in July, and gradually sell-off through the remainder of the year. Even though this data was tracked over a twenty-five year period, the contract might not always follow this pattern due to fundamental and technical reasons. The July 2013 chart appears to have found resistance along an upper trend line and technically setup to sell-off. This falls right in line with the Cash chart. Continue reading "Beyond the "Spotlight""→
The Energy Report: Looking back to your last interview with The Energy Report in November, you seem to have called the bottom in gas prices correctly. What's your view of where things are headed now?
Robert Cooper: We expect a reasonably robust pricing scenario ahead. Here's why: In 2013, we will likely see flat natural gas supply growth; this will be the first year in the last several that this will be the case. The natural gas rig count is at 350, the lowest since 1995. The declining rig count has taken its toll on almost every U.S. shale basin; the only basin that's growing is the Marcellus, and it is growing partly because infrastructure constraints are being alleviated. Unless productivity undergoes another massive step higher, or drilling time is cut in half again, rig count matters as a predictor of natural gas production levels. Natural gas liquids (NGL) prices are weak, and this impacts the ability of explorers and producers (EPs) to reinvest at the same level as even a year ago. This further reduces the probability that capital will be redeployed to dry gas plays.
June crude oil was lower due to profit taking overnight as it consolidates some of the rally off April's low. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends the rally off April's low, April's high crossing at 98.06 is the next upside target. Multiple closes below the 20-day moving average crossing at 91.93 would confirm that a short-term top has been posted. First resistance is April's high crossing at 98.06. Second resistance is February's high crossing at 99.52. First support is the 10-day moving average crossing at 93.85. Second support is the 20-day moving average crossing at 91.93.
June heating oil was lower overnight as it consolidates some of the rally off April's low. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends the aforementioned rally, the February-April uptrend line crossing near 295.58 is the next upside target. Closes below the 20-day moving average crossing at 284.23 would confirm that a short-term top has been posted. Continue reading "Morning Energy Commentary"→
September crude oil was lower overnight due to renewed concerns over Europe's debt crisis along with warnings from China that its economy is also slowing down more that previously expected. Stochastics and the RSI have turned bearish with the decline off last Thursday's high signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 85.43 would confirm that a short-term top has been posted. Continue reading "Energy Market Commentary"→