Revisiting Natural Gas

Back on April 4 I wrote that Natural Gas Will be Free by 2013. It had already fallen to 10 year lows at that point near 2.14. I caught a bit of flack for that one, but it did continue to drop a further 10% over the next few weeks, bottoming at 1.90. From the chart below this was right in line with the Measured Move lower out of the ascending triangle, within 2 cents. Now after a 3 week run higher it is still abiding by the technicals as it finds resistance at the midpoint of a symmetrical triangle

formed on the move lower at 2.54. A break above this level will go a long way to confirming a reversal higher, with first resistance at 3.25. Should the resistance hold and the price begin to fall again then the the targets of zero in the previous write up will still hold. the bad news for those of you in the reversal camp is that the daily chart below shows that at the current levels Natural Gas is near overbought and more importantly that the Relative Strength Index (RSI) is turning lower with a Moving Average Convergence Divergence (MACD) indicator that is positive but trending lower. This could mean continued consolidation but it could also mean a reversal. I have no dog in this hunt, well maybe a small Schnauzer as my home is heated with Natural Gas, so I don’t care what happens. Things are looking a bit brighter for Natural Gas, but it is not time to go all in.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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