Natural gas is packed in a tight falling wedge pattern. It is at historic support too, going back to August of 2019. Another point worth mentioning is that the price of natural gas defended this support on February 22nd of this year and produced a >40% rally, peaking on March 3rd. Virtually every timescale from the minutes to the weekly show positive divergences and oversold readings. The targets for this trade are the gaps above, marked in purple. Use UNG or BOIL (x2) for this trade.
Trade active:
The price has fallen back within the wedge, and then once again broke out of it. Now, it has back-tested the wedge from above and held. This failed breakdown coupled with the successful back-test is an objective long entry for anyone who missed the initial post. Or, you can add to your existing positions here
Comment:
Natural gas has only fallen twice this hard before in history. We saw an 81% decline in the early 2000s followed by an immediate 83% rip, later followed by another dip and then a triple digit bull market peaking in late 2005. Next, another 80% drop from 2008/9 followed by a nearly vertical 95% rally. If you are shooting for the moon here, don't get shaken out yet. Between now and the recent high in August 2022, natural gas has dropped 79%.
Comment:
The first of the two targets has been hit. As mentioned in the initial post, the targets are the large gaps above marked with purple rectangles.
Comment:
Natural gas, on the daily timeframe, now has a confirmed positive PPO crossover.
Comment:
The overnight dip and rip in prices today has simply extended the positive divergences on the PPO and RSI on the hourly timeframe. Natural gas appears to be building a basing pattern here. I also want to mention that in today's inflationary environment, natural gas is the odd commodity out that has not caught up (yet). Compare this to the chart of DJP. which tracks a basket of commodities. The forces of inflation exist but they haven't moved natural gas just yet.
Comment:
The price has impulsively taken out a key resistance on the hourly level (2.245) and also the last recent high set on April 11th. The PPO crossover on the daily has been defended well, and it's even poised to cross on the weekly timeframe too.