Monday, August 11, 2014

Natural Gas - Seasonal AND Elliott Support

 Gotta love it when Natural gets both Seasonal support AND Elliot support. These two factors are aligning now, and the fall seasonal rally has proven to be the big buying opportunity of the year over and over again.

The 23 yr. avg of spot prices has the seasonal low in mid Aug, followed by a significant rally exceeding 100% into mid Nov.

The major utilities and industrial users are well aware of the seasonal opportunity that presents itself in late summer, and with last winter's record low storage fresh in mind, they will be risking their jobs to miss it. 
EIA Storage
Storage still hasn't recovered. Praying for El Nino by now. Check out the last few years buying opps present at mid Aug.
Weekly
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Perhaps as important, if not more important than the seasonal trend, is the fact of a .618 retrace from the highs having been put in.  This retrace looks like a simple "abc" down, nearly c=a, and is the most significant retrace since the 2012 low of 1.90 in terms of outright price.

If the low is in and it represents a correction to the preceding $4.60 move off the low of 1.90, than a retest of the highs at 6.50 would be a minimum expectation.
If the next move up is equal to the last, it targets $8.32.

Daily
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A short term pull back, not below 3.75 would be an entry opportunity, with 4.30, the 50% retrace of the last leg down, providing resistance the bears don't want to see taken out.

The implication here is for a seasonally powered move with a both a fundamental and technically supported target that is very high.








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