Tuesday, October 2, 2012

Natural Gas Target Update


Check out the last natty post from Sept. 3 Natural Gas Seasonal Low?

"The low print on Wed the 29th ( Aug) of 2.575 was right on the 50% pullback looked for in the August 9th post,
...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. "

That was published a month ago.

Daily
click to enlarge

Very short term it's looking a little overdone, but as yet there is no evidence of exhaustion or negative divergence.
Note that on the weekly chart Natty has retraced .382 of the entire move down from 6.11 to 1.90.
And, though not really a head and shoulders fan, there is a measured target up around here.

Weekly

click to enlarge
So some definite resistance in evidence around the 3.51/ 3.55 area that IF taken out will signal an extension of the move. 
Medium term it does seem likely that the current move up will structure as another series of abc's for the Y  , and it looks like we are still in the middle of that.
The Y will equal the W at 3.96. The 50% retrace of 6.11 to 1.90 hits at 4.01. The 4.00 area is really the hurdle both technically and of course fundamentally, and for that reason is begging to be tested.
So another short term pullback or consolidation that retests the break out should be seen as an opportunity.
Y = 1.382 of W at 4.48 also the .618 retrace of 6.11 to 1.90
 Y  = 1.62 of W at 4.81 







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