Natural Gas Elliott Wave Review and Update 3/15/23

The recent rally up from the multi year low of 1.9, gained 57% or 1.01 to 3.07. That took 1.5 weeks! I've got that labeled wave 1 up in the below chart. Why a wave 1 vs a corrective A wave? A number of technical factors persuade me this is the beginning of a longer term move up even if it turns out to be corrective. 

 

 

Firstly the C=A at the low. Admittedly I am using a somewhat unconventional count for the B wave at 7.10 but...will discuss the alternate later. In the chart above you will note a Positive divergence on the RSI.

 At the lows of 1.98, NG had retraced 93% of the post Covid move up.There was and continues to be, a flurry of deals either side of that low suggesting weak hands are lightening up and perhaps project finance hedging getting done.

 There is a pretty good argument that Nat Gas cycles are structures of 3 waves or ABC's of Super Cycle degree.

I think there is a series of  2 abc's down from 15.65 finishing at 1.44. If that IS the case than another wave up to to form a C wave up from 1.98 might develop.   A Fibonacci .618 retrace of the entire move down would target 6.99

The Winter strip, Nov3/Mar4 is running around 3.69.

 

 

 

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 NG seasonality sees lower numbers in Feb/Mar, and increasing prices into May/Jun. 

Of course increasing LNG exports, weather, and EU demand are theoretically discounted, so it will, as always, be interesting to see whats in the wings! 

 

 Not trading advice. Not a recommendation. Not representing ANY firms views. 

The above is a theoretical, philosophical, and hopefully educational, musing by

a completely Natural Intelligence.

 


 


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