Monday, February 27, 2017

Natural Gas- Are We There Yet?

Natural Gas is off 32% from the Dec 28 highs of 3.902. Not a little. We are now in the period, Feb/Mar, during which NG often finds seasonal buying of a couple months duration. The question then,   "Are we there yet", once more arises.
 3 yr.chart
 click to enlarge
The answer I think, is the usual, "Not yet but we' re close. " 
Just under the previous lows in the above chart is the Fibonacci .618 retrace point at 2.48
With an internal sub wave measured move providing support around 2.50, new lows under 2.64 should run out of steam in that area, with shorts covering on all the above factors. 
It would be nice to see some positive divergence showing up on the RSI at that point as well.

1 month chart
 click to enlarge
Shorter term the choppy action since the Feb 22 low of 2.64 is typical of corrective waves and would be expected to resolve to the downside. That's not to say it will not have another little push to the weeks highs around 2.80 before heading lower.

Natty may well be making a very important pivot at the discussed levels with substantial upside potential based upon the very long term chart basing history. Stay tuned.

 25 yr. chart
 click to enlarge

Not a trading recommendation. Do your own research. Good luck.








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