Nat Gas's Rally To Strengthen
Fundamentals: The global Nat gas supply is one of the tightest in the commodity space. Historically hot weather all over the world -most notably in Europe and in parts of the US- has created an abnormal amount of demand for nat gas this summer.
Climate change and extreme weather are also now threatening the passage of cargo ships through the Rhine river, which could have big implications on the price of several European imports including nat gas.
All the while Putin looks to use his pipeline Nordstream 1 as a bargaining chip in the face of NATO sanctions. There has already been talk about a complete halt of Russian gas into Europe coming in the fall of 22.
Technicals: A cup and handle formation looks to have formed on the daily chart, currently in the final stage, in which NG1! should break out to new highs. Momentum is very strong on monthly, weekly, and daily timeframes. The volume for this rally is certainly not the strongest. NG1! found support and bounced nicely off the 50% retracement level of around 7.5. Despite the low volume, I think new highs are a lock here for US nat gas. This is a textbook cup and handle, I expect an upside target of 13.65 to be hit in the medium-term outlook for NG1!.
As always this is not trading advice. Good luck!
Climate change and extreme weather are also now threatening the passage of cargo ships through the Rhine river, which could have big implications on the price of several European imports including nat gas.
All the while Putin looks to use his pipeline Nordstream 1 as a bargaining chip in the face of NATO sanctions. There has already been talk about a complete halt of Russian gas into Europe coming in the fall of 22.
Technicals: A cup and handle formation looks to have formed on the daily chart, currently in the final stage, in which NG1! should break out to new highs. Momentum is very strong on monthly, weekly, and daily timeframes. The volume for this rally is certainly not the strongest. NG1! found support and bounced nicely off the 50% retracement level of around 7.5. Despite the low volume, I think new highs are a lock here for US nat gas. This is a textbook cup and handle, I expect an upside target of 13.65 to be hit in the medium-term outlook for NG1!.
As always this is not trading advice. Good luck!
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