NG - A Sad Day
The past set of trading days has been horrendous for the value of natural gas. I posted an earlier idea that suggested natural gas would rally before bowing to the overall negative trend. It opted to instead decline further.
Right now we are at the key $5 level. If you go back on the chart (it hasn't been to this level for a while,) this level serves as major psychological resistance.
At this point, it looks like a "falling knife" where there is absolutely no visible upside. You may want to wait for some sort of reversal pattern before going long, but it could happen here.
If you want to go short, you may want to wait for some sort of pullback as well. Breaking through this support level of $5 would also work.
If it does bottom here, you can expect further upside as it will look somewhat like a double bottom pattern with the $5.5 earlier.
These levels are also starting to get back to more "natural" prices for natural gas.
If you think that the geopolitical mess or upcoming winter will be especially bad, this would be a generally good place to accumulate it.
If not, wait until unnaturally low prices to buy. For instance, around 2020 it hit $1.85. Two years later, it briefly touched $10. Now, it is in the middle of that range.
Personally, it looks to me like a late 2005 pattern where it spiked, came down, and then came back up and made a head and shoulders pattern. Back then, it came back to where it had been immediately prior to the spike, which was about $6. You can probably expect about $3 or $4 if this is any sort of guide.
Overall, you should be able to finally catch some sort of profit going long. This sort of point where everyone has given up can offer a great (though it may be a short-term) opportunity.
Right now we are at the key $5 level. If you go back on the chart (it hasn't been to this level for a while,) this level serves as major psychological resistance.
At this point, it looks like a "falling knife" where there is absolutely no visible upside. You may want to wait for some sort of reversal pattern before going long, but it could happen here.
If you want to go short, you may want to wait for some sort of pullback as well. Breaking through this support level of $5 would also work.
If it does bottom here, you can expect further upside as it will look somewhat like a double bottom pattern with the $5.5 earlier.
These levels are also starting to get back to more "natural" prices for natural gas.
If you think that the geopolitical mess or upcoming winter will be especially bad, this would be a generally good place to accumulate it.
If not, wait until unnaturally low prices to buy. For instance, around 2020 it hit $1.85. Two years later, it briefly touched $10. Now, it is in the middle of that range.
Personally, it looks to me like a late 2005 pattern where it spiked, came down, and then came back up and made a head and shoulders pattern. Back then, it came back to where it had been immediately prior to the spike, which was about $6. You can probably expect about $3 or $4 if this is any sort of guide.
Overall, you should be able to finally catch some sort of profit going long. This sort of point where everyone has given up can offer a great (though it may be a short-term) opportunity.
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