Commodity Weekly 20072011

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  • 8/6/2019 Commodity Weekly 20072011


    Karen Jones | Technical Analysis Research | Wednesday, 20 July 2011

    Technical OutlookCommodity Weekly Technicals

  • 8/6/2019 Commodity Weekly 20072011


    1Karen Jones | Technical Analysis Research | Wednesday, 20 July 2011

    Technical Outlook

    Cotton slide is expected to stabilise at the 200 week ma at 84.52Cotton

    Corn still viewed as a potential topCorn

    Corrective near termICE ECX Emission Dec 2011

    Negative bias while capped 273/74NY Coffee

    Key day reversal suggests near term consolidation.Spot Gold:

    Bid in range, capable of challenging the 2592 downtrendLME Zinc:

    Continues to struggle at 994.50ICE Gasoil:

    Rally should struggle 4.63/4.79NYMEX Natural Gas:

    Outlook neutralised price pushing hard into key resistance at 2554/72LME Aluminium:

    Remains on course for the 10190 peak.LME Copper:

    Market maintains rebound from key support 21431/21091 (200 week ma) and we look for further strengthLME Nickel:

    Focus remains on the 3.20 resistanceRBOB Gasoline:

    Rally expected to stall 3.15/20.NYMEX Heating Oil:

    Market consolidating below Fibo resistance at 121.72ICE Brent Crude Oil:

    Price starting to erode the 55 day maNYMEX Light Crude Oil:

    Well placed to challenge the 5400/02 resistanceS&P GSCI TR Index:

    Short term view (1-3 weeks)Market

  • 8/6/2019 Commodity Weekly 20072011


    2Karen Jones | Technical Analysis Research | Wednesday, 20 July 2011

    S&P GSCI Total Return Index

    S&P GSCI Total Return Index Daily Chart

    Well placed to challenge the 5400/02 resistance.

    The S&P GSCI index continues to rebound off the 55 weekma at 4853 and the 4745 January 2010 high. This support,together with the 50% retracement at 4775 (of the move

    higher seen from mid 2010), offers strong support and therebound from here has started to erode the 55 DAY ma.This has neutralised the immediate outlook and the marketis well placed to tackle the highs seen in May and June at5400/02. The market will need to regain this zone torestore upside pressure.

    We are cautious at this stage the market has not quitedone enough to restore upside pressure and we areunable to rule out further consolidation and a further stabdown to 4853. Initial support is 5015.

    From a longer term perspective, following the erosion ofkey resistance offered by the 5045 2007 low, an upsidemeasured target to 6124 remains in place. This will remain

    the case while above the January high at 4745. Only belowhere will neutralise this outlook.

    55 day ma at 5263

  • 8/6/2019 Commodity Weekly 20072011


    3Karen Jones | Technical Analysis Research | Wednesday, 20 July 2011

    Nymex Light Crude Oil

    NYMEX Light Crude Oil Daily Chart

    Price starting to erode the 55 day ma

    Nymex Light Crude Oil sidelined between the 55 and 200day moving averages at 94.23/98.52, but starting to erodethe 55 day ma. The market has rebounded from its 55

    week ma support, which lies at 89.83 and while underpinned here the outlook is positive.

    We consider key short term resistance 103.39 31st Mayhigh. We suspect that the market will struggle to gain afoothold above here on the initial test and will remain somewhat sidelined very near term. Above 103.39 is needed to

    restore upside pressure and target 110 and then114.80/117, where we would expect the market to againfail.

    Failure to hold 89.83/55 week ma will target the 83.73/44zone, this is the 200 week ma and the 38.2% retracementof the move higher over the past 2 years.

    Favoured long term scenario. While underpinned by the 55week ma the market is neutral to bullish market will haveanother attempt on the topside but is not expected tosustain a move much beyond the highs already seen.

    55 and 200 dayma at 94.15/98.61

  • 8/6/2019 Commodity Weekly 20072011


    4Karen Jones | Technical Analysis Research | Wednesday, 20 July 2011

    ICE Brent Crude Oil

    ICE Brent Crude Oil Daily Continuation Chart

    Market consolidating below Fibo resistance at 121.72

    200 day ma at


    Brent crude oil is consolidating just below the 78.6%retracement resistance at 121.72.

    The short term risk is that we will see the market fail hereand range sideways. Immediate support is offered by the55 day ma at 114.41, however we suspect that the marketcurrently lacks the upside impetus to clear 121.72, whichwill leave the market to drift lower in its range.

    Only above 121.72 will generate upside interest to the

    127 peak. Longer term it is possible that the pattern onthe weekly chart is a falling wedge and above 127 willtarget approximately 140 longer term.

    Should we see the market fail at the 120-121.72resistance, the short term risk will shift back to thedownside. We would allow for a slide back to the 200 day

    ma and recent low at 103.85/102.28.

    This is key support we would again allow for it to hold.Failure here would see further slippage to the 55 week maat 97.39 then the 91.02/2 year support line.

    78.6% retracementat 121.72

  • 8/6/2019 Commodity Weekly 20072011


    5Karen Jones | Technical Analysis Research | Wednesday, 20 July 2011

    NYMEX Heating Oil

    NYMEX Heating Oil Daily Continuation Chart

    Rally expected to stall 3.15/20.

    Heating Oil continues to consolidate just below the3.15/3.20 region. This is the June high and the 78.6%retracement. We would allow for this to hold the initial test.

    The market would need to regain this resistance for aretest of the 3.3510 level to be likely, which we again lookto hold. This is the 3 year high and we suspect that themarket may have topped here. This was a 13 count onboth the daily and the weekly charts on TD Combo.

    Currently we suspect that the market will stall at 315/320

    and remain somewhat sidelined. However below the 200day ma we would allow for the slide to extend to 2.50. The2009-2011 uptrend is not encountered until 2.41. There ispotential for a slide back to here, but while this holds, theLONG term bullish trend will in fact remain intact (the 55and 200 week ma is also located in this vicinity at 2.57 and2.3396).

    Previous high at


    200 day ma at2.7583.

  • 8/6/2019 Commodity Weekly 20072011


    6Karen Jones | Technical Analysis Research | Wednesday, 20 July 2011

    NYMEX Heating OilLonger term allow for slippage into the 2.50-2.41 band

    Uptrend at2.42

    Market has rejected the 3.3510resistance

  • 8/6/2019 Commodity Weekly 20072011


    7Karen Jones | Technical Analysis Research | Wednesday, 20 July 2011

    ICE GasoilContinues to struggle at 994.50

    ICE Gasoil is consolidating below the June high at 994.50.We suspect that it may fail here and in the short term islikely to ease lower in its range towards the 200 day ma at


    While capped by 994.50 the risk is that the market remainssidelined and drifts back to the 865/ 857 support.

    Below 857 we would allow for losses to support at 800 andpotentially 747.50, the April 2009 high. The 55 week ma is

    located at 810 and the 200 week ma lies at 741, and theseoffer additional supports in this zone.

    Above 994.50 would re-target 1064.50 then the 1075.50August 2008 high.

    ICE Gasoil Daily Continuation Chart

    200 day ma at870.34

    June high at 994.50

  • 8/6/2019 Commodity Weekly 20072011


    8Karen Jones | Technical Analysis Research | Wednesday, 20 July 2011

    NYMEX Natural Gas

    Natural gas has seen a strong rally higher, which hascleared the 4.41/4.42 zone and in doing so has focussedinterest once more on overhead resistance at 4.63/4.79,

    the break point to the 4.9830 June high.

    Intraday dips should ideally hold over 4.41 to maintain nearterm stability and a near term upside bias towards the 4.63then 4.79 levels, where we suspect the upmove willstruggle.

    Below 4.41 will again neutralise the immediate outlook andallow for a slide back to 4.0770/4.064 which is againexpected to hold.

    A close below 4.077 would trigger another bout ofweakness towards 3.99 then the 3.73 low. This togetherwith the 2009-2011 uptrend at 372 should hold thedownside and prompt recovery.

    The longer term chart continues to look like it is trying tobase however there is a lot of work needed to regenerateupside interest. The a close above 4.88 is needed to triggera move to 5.19/20 June high and eventually target the 5.71200 week moving average.

    NYMEX Natural Gas Daily Continuation Chart

    Rally should struggle 4.63/4.79

    200 day ma at 4.196

  • 8/6/2019 Commodity Weekly 20072011


    9Karen Jones | Technical Analysis Research | Wednesday, 20 July 2011

    Crude Oil Vs Natural GasStarting to break the 2 year uptrend at 21.54


    Uptrend at 21.54being eroded

    The 2 year uptrend foroutperformance of Crude Oil VsNatural Gas appears to beending

  • 8/6/2019 Commodity Weekly 20072011


    10Karen Jones | Technical Analysis Research | Wednesday, 20 July 2011

    NYMEX RBOB Gasoline

    The market is consolidating sideways just below the 3.20zone. A close above here is needed to confirm andreassert upside interest for a retest of the 3.50/3.6310


    While capped here the risk remains that it will fail and driftback to the 200 day ma and Fibo support at 2.68/65

    Should support at 2.65 give way, there is scope longerterm for a slide to the 55 week ma and 2 year uptrend at2.5254/2.3990 prior to stabilising and reattempting the


    Slightly longer term we look for the market to remaincapped