Natural Gas had its typical seasonal springtime rally, as well as a typical summertime pullback. The seasonality trade has worked like a charm thus far, and history suggests a general bearish trend until Labor Day. The chart, on the other hand, is showing some bullish signs after a Natural Gas breakout above its recent downtrend line.
NG Technical Research Update
Natural Gas pulled back more than 10 percent (the technical definition of a “correction”) from $3.00 to $2.62 in the last months. The $2.62 area is significant as it was the price ceiling (resistance) for more than a week in mid-June before it continued its upside trend. NG then pulled back and held $2.62 in late June before finally surging to nearly touch the $3.00 mark. In the below chart, you’ll see a rally late last week breaking the downtrend off the $3 high, having tagged the $2.62 mark once more on Wednesday. Obvious resistance is of course at $3 and support is at $2.62. A move below $2.62 brings an unfilled gap into longer-term play near $2.
Also Read Mike’s Prior Post: Natural Gas Golden Cross: Should Traders Care?
Natural Gas 3-Month Chart: $2.62 Support Tagged, Natural Gas Breakout Attempt from Bullish Consolidation
You can also follow the Natural Gas ETF (NYSEARCA:UNG), but note that due to contango and other futures-related tracking issues, it is far from a perfect match. Thanks for reading.
Twitter: @MikeZaccardi
The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
