Monday, September 3, 2012

Natural Gas Seasonal Low?

The low print on Wed the 29th of 2.575 was right on the 50% pullback looked for in the August 9th post,
Post #1001- Natural Gas Update
" while still really liking NG for the long term, it is looking vulnerable to a Fibonacci %  pullback following the ABC up from 1.90 to 3.27. 
There is a seasonal low window in mid Aug. normally followed by an avg. 115% rally and , while it has not been much in evidence the last couple years, it could exert influence anytime especially following a sharp move down to Fib. 2.58, or 2.42.
So medium term risk of a deeper pullback as in an X wave, offering longer term opportunity for another abc up."

Got that.    
Daily
click to enlarge

It may be that the 50% retrace of 1.90 to 2.27 is only the first part of a larger pullback to say 2.43, the .618 retrace, or perhaps an "a" of larger degree within a flat correction....BUT

The c = .50 of a, the 23 yr avg seasonal low is right in here, the downward sloping trendline shown above is penetrated, and the MaCD looks like it wants to turn up.

So given the big picture....(see  Natural Gas Hits Long Term Target)  seasonal and technical support,
the avg rally following the seasonal lows of 115%, and the 13 year low in the rig count, upside risk is 
much greater than downside.

In fact, the timing is probably perfect for very long term, opportunistic plays like lease acquisition. 



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