Natural Gas Seasonal Bullish Setup Weekly / Daily
Updated
Natural Gas is showing signs of strength aligning with seasonality data.
"Analysis has revealed that with a buy date of September 2 and a sell date of October 20, investors have benefited from a total return of 56.09% over the last 10 years. This scenario has shown positive results in 7 of those periods."
equityclock.com/charts/natural-gas-futures-ng-seasonal-chart/
Weekly chart shows price trading within a descending channel since 2009, which is actually part of a larger falling wedge originating from the 2006 high. When the wedge is drawn on a chart of NG futures contracts, it actually shows bulls attempted to break out of the wedge when price spiked Oct - Dec of last year. Three consecutive weekly rejection candles clearly show the attempted breakout before bulls gave up and price broke down. (Will post a snapshot in the comments)
The large spike in price 2018 occurred within the same seasonal range. Price rose from $2.75 to $4.88 a 75% gain in a matter of weeks. Natural Gas reserves have been steadily declining since 2016 (I charted data from ir.eia.gov/ngs/ngs.html), shown below. Peak reserves in 2018 were at the lowest level since 2005, a time when prices were trading around $14.00. Even considering a decrease in demand and new technologies increasing potential supply, last weeks closing price of $2.48 is still trading at a steep discount...
prntscr.com/p358w0
Daily chart shows a smaller descending channel which was broken to the upside last week. Price is currently nearing short term resistance. Expect trend to resume to the upside. Looking for possible channel retest or pullback on the 1 hour chart to enter with trend. Technicals and fundamentals seem to be aligning for a low risk / high reward trade opportunity over the course of the next couple months.
$2.30 = channel support
$2.05 = YTD low
Commodities in general are coming off multi-year lows and seem to be gaining favor....
Will post daily chart in the comments for context.
"Analysis has revealed that with a buy date of September 2 and a sell date of October 20, investors have benefited from a total return of 56.09% over the last 10 years. This scenario has shown positive results in 7 of those periods."
equityclock.com/charts/natural-gas-futures-ng-seasonal-chart/
Weekly chart shows price trading within a descending channel since 2009, which is actually part of a larger falling wedge originating from the 2006 high. When the wedge is drawn on a chart of NG futures contracts, it actually shows bulls attempted to break out of the wedge when price spiked Oct - Dec of last year. Three consecutive weekly rejection candles clearly show the attempted breakout before bulls gave up and price broke down. (Will post a snapshot in the comments)
The large spike in price 2018 occurred within the same seasonal range. Price rose from $2.75 to $4.88 a 75% gain in a matter of weeks. Natural Gas reserves have been steadily declining since 2016 (I charted data from ir.eia.gov/ngs/ngs.html), shown below. Peak reserves in 2018 were at the lowest level since 2005, a time when prices were trading around $14.00. Even considering a decrease in demand and new technologies increasing potential supply, last weeks closing price of $2.48 is still trading at a steep discount...
prntscr.com/p358w0
Daily chart shows a smaller descending channel which was broken to the upside last week. Price is currently nearing short term resistance. Expect trend to resume to the upside. Looking for possible channel retest or pullback on the 1 hour chart to enter with trend. Technicals and fundamentals seem to be aligning for a low risk / high reward trade opportunity over the course of the next couple months.
$2.30 = channel support
$2.05 = YTD low
Commodities in general are coming off multi-year lows and seem to be gaining favor....
Will post daily chart in the comments for context.
Note
NG Futures Weekly chart showing breakout attempt from falling wedge.Note
NATGAS Daily - Showing breakout from smaller descending channel and possible resistance levels.
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