Nat gas looks ready to “pop”

August 10, 20154 Comments

Today’s chart is an updated one of Nat Gas that I used on a blog way back in 2013—I kept my notations on the chart from that date. I showed readers that gas had completed a H&S bottom, tested its neckline, and looked ripe to move back to its old technical resistance levels of $5 / NBtu from 2011. I can take a bow on that call. In fact, Nat Gas moved above my target briefly by hitting $6.40 briefly in early 2014.

Currently, Gas is finding support around that old neckline support level established back in 2011. It looks to me like it’s trying to consolidate in a symmetrical triangle. A breakout through $3 would be quite encouraging on this commodity. Should that happen, it wouldn’t be  stretch to see gas hit $4 (2014 support level). The old heights of $5 might be a stretch, but you never know.

nat gas long

Like all consolidation formations, you don’t trade within them—you trade only after an established breakout. That’s because you could also see a downside breakout from this triangle. And that might get ugly. I’d expect the bottom of 2011’s “Head” on the chart around the sub-$2 area would be a target should a bearish breakdown occur. But gas has seasonality on its side shortly. Thackray’s guide tells us it tends to move well between September and year-end. So I’m thinking it may just see an upside breakout this year.

So—lets re-visit Nat Gas again in a future blog. I’ll see how this formation has played out, and add my commentary as needed. Remember—don’t trade it until it tells you which way it’s going to break.

 

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4 Comments

  • Hi Keith,
    I would like your opinion on Power Financial. It appears that it has pulled back to support. I am thinking about buying it back. Thanks.

    Reply
    • remember John, I prefer to keep this type of question to my BNN appearances–Id rather address specifics to a given blog at any time
      We are looking at PWF–it has 2 main components IGM and GWO–the PWF chart looks more like the IGM chart–it is back at support and we are considering it. Id like to see it bounce a bit first.

      Reply
  • If Nat Gas does break out to the upside can you recommend an ETF to trade it.

    Reply

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