Wednesday, April 27, 2011

Natural Gas Update

NG continues "crawling into the apex of a triangle" . Please see the last post for the pro's and cons.

 Active Mo. Weekly
 click to enlarge
Check out the convergence of support around the 3.80/ 3.82 area; the .618 retrace of 2.40 to 6.11, previous low 2x, triangle trend line support (depending on the date) and if the high at 4.88 is an X wave, that level will represent the second zig zag = .382 of the first zig zag.
 click to enlarge
Both potential counts are represented by the labeling. If it's a 1,2 then it's going to take out the weekly trend line around 4.64 and overlap the high in the above chart at 4.88. Note the minor penetration of the tightest declining resist line. In this count it probably shouldn't get under the 50% retrace at 4.24 if it's in the early stages of a 3 wave.
If it is the alt count and natty has to continue further into the triangle the highs this morning are a good candidate for a reversal. Note the -c- = .618 of -a- in the above. 
 click to enlarge
The 14 RSI has repeated negative divergence.
So short term a likely pull back. Will the 50% retrace at 4.24 hold it?

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