Natural Gas Will be Free by 2013

This of course will wreak havoc across the mid west where every farm, golf course and park has a has a gas well on it to reduce their other costs. But following up on a post from late January on Natural Gas it seems that the bottom was not in, as suspected (link below). And two months on down the road there may not be an end in sight to the fall. Lets take a look.

The monthly chart below shows the break of the rising 20 year trend line support in December and since then it has not looked back. A big move one month followed by consolidation the next. Now resting at support at the 2001 lows it has a falling Relative Strength Index (RSI) that is hugely bearish and a Moving Average Convergence Divergence (MACD) indicator that is negative and growing more so. These point to more downside. The next support lower comes at 1.64 and then

1.35 from 1995. With the pace of the decline and size of the volume bars on the sell off this could happen before year’s end. This is ugly. Is there anything on the weekly chart that might suggest a stall or slowing of the move lower? Not really. The break of the ascending triangle gave it a target of 1.50 being generous but then the wedge formed at 2.50 after falling from 5.00 moved that

target lower to zero. Given that the move from 5.00 to 2.50 to 8 months the move down to zero could be done by the end of October. Clearly it is not going to get to zero but this is still a train wreck. Stay out of the way unless playing it to the downside.

Natural Gas May be Bottoming…or Not

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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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