WAVES.OIL – LONG NAT GAS, SHORT OIL CONTINUES

We made the intermediate LONG NATGAS, SHORT OIL case on 15 JUN. The pair is up 21%. We continue to look at a secular outperformance of NATGAS against OIL. A few reasons.

The minor performance cycle has turned up in favor of NATGAS. Oil is completing the five wave impulse. Even if it means a minor retracement, OIL at 60 can not be ruled out. We would like to clarify that we are OIL Bulls with a 2012 target above $ 373. We consider this down leg on OIL as the last for a few years. On intermediate time frames ROC cycles continue to exhaust and point lower. Oil barely managed to test 200 DMA. Unlike many energy assets crude respects the 200 DMA very well. We have illustrated this aspect on prior occasions. Prices are testing the intermediate channel and are sub 70 (SLIDE4). A clear break here will confirm anticipated negativity.

On the energy stock front, all of Chevron, Exxon, Verbund and OMV remain negative and point lower. XLE, the energy spider is also retesting previous highs. We need a clear break at 57 to review.

We have carried the anticipated and happened case on GASOLINE and NATGAS prices. Unlike Oil, NATGAS has a potential MONTHLY KEY REVERSAL bar. This is a large reversal and should not be ignored. Even RSI NON CONFIRMATIONS suggest positivity.

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ORPHEUS GLOBAL RESEARCH

WAVES.OIL is a perspective product published once a week. The report covers BRENT, WTM, XLE (Energy SPDR), top energy stocks, Natural Gas and related FUTURES. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators. REUTERS RICS: BRT-, WTM-, .XLE , CVX.N, XOM.N, IPNG, NG-P-CAL
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