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Is Natural Gas Ready For An April Rally

Our researchers have been following Natural Gas for many months and believe the current price level, near $1.65, is acting as a continued historical support level (a floor in price).  Our researchers also used one of our data mining tools to attempt to identify if any opportunity exists in NG over the next 30 to 60+ days for skilled traders.  The purpose of this data mining tool is to explore historical price activity and to determine if there is any true price “bias” that exists within certain months.

For example, if we could determine that Natural Gas tends to rally in April by a 2:1 ratio (historically) and that the rally in NG is typically somewhere between $0.50 and $1.50 to the upside, then we could attempt to use this information to set up a trade that allows us to attempt to profit from this potential future trend bias.  A 2:1 ratio would indicate that, historically, the price rallied 10 times and didn’t rally 5 times over a span of 15 instances.

Our data mining utility reported the following data for April, May, and June in Natural Gas.

MONTHLY NATURAL GAS PRICE CHART

If we look at the APRIL data, the POS bars = 17 and the NEG bars = 8 – that sets up a slightly greater than 2:1 ratio of advancing price over declining price in April.  The “Total Monthly Sum” across 25 instances of data is $1.12 whereas the Average for the POS price activity comes to just $0.24.

This suggests that in April, we have a fairly high opportunity for some upside price activity in Natural Gas based on this data – a nearly 2:1 advancing price ratio (historically).  Yet it also means that advancing price may only rally $0.35 to $0.75 from any price bottom – so we have to be aware of risks that may exists with a small price advance from the current low levels.

If we take a look at the MAY data, the POS bars = 13 and the NEG bars = 11 – that sets up a 1.18:1 ratio that suggests a very slight advantage to the possibility that continued upside price activity will happen in May.  Yet, the upside price advantage shown my the “Total Monthly Sum” data suggests a very big opportunity for a breakout rally in May (+$2.40).  The way I interpret this data is to understand that May is roughly 60/40 biased to the upside whereas if any upside move takes place in April, a continuation of that trend in May could be incredibly profitable with a proper strategy.

Take a look at the JUNE data and try to come up with an interpretation yourself.  The POS bars / NEG bars represent a less than 1:1 ratio.  The Total Monthly Sum ($0.21) is not a very substantial price advance.  The data is somewhat indecisive or inconclusive in suggesting any real price advantage in June for trading.

Yet, we have a very clear advantage in April and May.  So, how are we going to approach this trade setup?

WEEKLY NATURAL GAS CHART – CYCLES & SUPPORT

Currently, NG is testing very deep price levels within the BLUE support range box.  Aggressive traders can attempt to look for opportunities within this range but must understand risks are still high for continued moderate price decline before a bottom sets up in April.  Skilled traders would wait for the bottom to set up and possibly look for opportunities in ETFs as a means to limit risks on initial positions – attempting to scale into the trade comfortably.

Once the rally in NG really sets up and breaches the $1.98 level moving higher, then we believe we have a very real rally on our hands that may see price levels back above $2.75 eventually.  The $1.85 to $1.99 price level will act as resistance as price attempts to move higher.

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Why are these types of setups so important to skilled traders?  Historical price structures and patterns, like this data mining pattern, help to clearly illustrate strategic advantages in certain markets for skilled traders. Determining how to set up a proper trade knowing this data is also important.  Risks exist with every trade you make and I’m sure we’ve all learned a lesson or two about making a hasty trade and not thinking about it?

Our research team believes April and May 2020 could be very exciting for Natural Gas.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

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Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Natural Gas Reloads For Another Price Rally

As a technical trader, one has to really learn to appreciate when a trade “reloads” for another move higher.  Much like the Gold base/bottom in April 2019 below $1300 that we called back in October 2018.  When a trend confirms and we can see the potential for upside profits, but price performs a “deep pullback” withing that initial trend setup – it is almost like we’re dreaming.

After the downside rotation in Gold setup in April 2019, the next move higher pushed Gold prices up to $1550 from levels near $1275 – what a great move that was.  Now, imagine Natural Gas may give us another chance to get long below $2.30 with an upside target near $3.00 before mid-November?  Incredible – right?

Read our original research post here : https://www.thetechnicaltraders.com/has-the-basing-setup-in-natural-gas-completed/

Here it is, folks.  After setting up a very deep price base in August 2019, Natural Gas has, again, moved back into the basing zone and our historical price research still suggests October and November will be strongly positive for Natural Gas.  We believe the upside potential in Natural Gas could target $3.00 fairly quickly – possibly before mid-November 2019.

THIS DATA IS QUOTED FROM OUR ORIGINAL RESEARCH POST…

“Our research tools suggest that September has a 65% probability of rallying more than 6x the historical range.  This would suggest a rally potential of more than $2 exists in September for Natural Gas.  Our tools also suggest that October has a 75% probability of rallying more than 3.2x the historical range.  This would suggest a potential rally of more than $1.20 in October. “

DAILY NATURAL GAS CHART

WEEKLY NATURAL GAS CHART

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This Weekly Natural Gas chart highlights the “bump” in price that happened in September and how price has fallen back into the basing zone.  It is almost as if the market forgot what Natural Gas should be doing, historically, at this time of the year.  Well, who cares.  If the markets are going to give us another chance at a +30% price rally – we’re not going to miss the opportunity to buy within the basing zone.

Our opinion is that any opportunity to buy below $2.40 is an adequate entry level.  Ideally, try to wait for levels below $2.30 if possible.  This new basing zone pricing may not last very long, so try to take advantage of lower prices when possible.  Ideally, the upside potential for this move should be fairly easy to target given the historical price patterns that consistently drive Natural Gas higher in October and November.

CONCLUDING THOUGHTS:

As skilled traders, we have to learn to take advantage of when the markets provide us with these extreme opportunities and setups.  We believe any upside move above $2.75 to $2.80 would be a suitable outcome for this extended basing pattern.  Gutsy traders could attempt to hold for levels above $3.00 – but we’re not confident that extreme price level will be reached quickly.

One thing most traders don’t understand is that the extreme winter weather that just hit the US and Canada last week could be a fairly strong indicator of early demand for heating oil, natural gas and other consumer energy products as an early winter may be setting up.  Either way, we believe this setup is a gift for skilled technical traders – don’t miss out.

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

Be sure to ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Round or Gold Bar and SPECIAL OFFER – CLICK HERE

I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these supercycles are going to last years. This quick and simple to understand guide on trading with technical analysis will allow you to follow the markets closely and trade with it. Never be caught on the wrong side of the market again and suffer big losses. PDF guide: Technical Trading Mastery

Chris Vermeulen
www.TheTechnicalTraders.com

Natural Gas Sets Up Bottom Pattern

In less than two weeks, our prediction that Natural Gas would move lower into our “basing zone”, between $2.00 and $2.20, has come true.  Natural Gas has fallen into our expected basing/bottoming zone and traders should be looking to target low price entries as the extended setup of this base takes place. You can read our original research post regarding our Natural Gas analysis from June 10, 2019: NATURAL GAS MOVES INTO BASING ZONE It is our belief that anytime Natural Gas falls below $2.20, or lower, traders should consider jumping into NG related ETFs or NG future as this bottoming zone will likely push NG back above $2.35~$2.40 fairly quickly.  Historically, any price move to levels closer to $2.00 have been very strong support for Natural Gas and this early basing pattern is setting up for an incredible opportunity for traders. Ideally, we are expecting an upside the month of July to represent continue basing/bottoming in NG where we expect NG prices to rotate between $2.00 and $2.75.  There is a moderate change that NG prices may attempt a move above $2.75 after July 20. We believe August will result in a sideways downward sloping price pattern that may last only through the first 10 to 15+ days of August.  The month of August is typically relatively muted in terms of price trend but includes greater price volatility – bigger price bar ranges. The big breakout move will likely begin to happen in late August or early September.  September, October, and November are all historically strong months for NG.  September is the strongest month historically, October represents about half the upside strength of September and November represents, again, about half the upside strength of October. Overall, this basing/bottoming pattern in NG is something skilled traders do not want to lose focus of.  The opportunity at these sub $2.25 levels is incredible if traders are able to time their entries and plan for the August/September upside price launch.  Looking back at historical price patterns, we could begin an upside price bias (a slower moving upside price trend) in early July.  After NG hammers our a bottom near this $2.00 level and settles near support, the new trend should become evident as an upside price bias before the August/September liftoff. This Daily NG chart shows the RED and CYAN Fibonacci projection levels (near $2.18 and $2.28).  These levels will act as both a floor and ceiling for the future price as the basing pattern continues.  Any breakdown in price below $2.18 would be a great entry level for skilled traders.  There is a potential that price could drift a bit lower, possibly down to near $2.00 over the next few weeks, but we believe the basing/bottoming setup is beginning and support will be found above $2.00.
This Weekly NG chart shows a BLUE rectangle that highlights the support level identified by our proprietary Fibonacci price modeling system.  Right now, this support level is between $2.10 and $2.30.  These Fibonacci downward price projection points on the Weekly chart represent expected levels/targets for downward price SUPPORT to form.  In other words, from the last price peak, price should move lower and target these Fibonacci projected targets where they will likely stall, bottom or attempt to find support – potentially setting up a new price “trough”. We believe the next upside price move will happen between now and July 25th where NG will move from the $2.15 level to somewhere near $2.55 to $2.65.  After that move, we expect the price of NG to stall briefly before beginning another leg higher towards $3.00 or higher.  Our expectations of that last leg are that it may begin near mid-August and really begin to accelerate as we get closer/into September.
Remember, this is a very early set up – we still have 40+ days of expected basing/bottoming before any real upside potential is likely.  Now is the time to trade this as short term 4~8% price objectives taking very skilled trades near the low price levels and targeting quick profits.  As we enter July and move into August, we suggest traders switch from the short-term scalping mode and begin to consider the September, October & November historical price patterns to truly understand the upside potential. Take a look at that huge move in 2018 over those same three months (September, October, November) in the chart above.  That move started from the $2.65 level and ran all the way up to near $5.00.  The same thing could happen again this year with price originating from a $2.00 basing level. I can tell you that huge moves are about to start unfolding not only in the energy sector but in metals, and stock indexes and some of these super cycles are going to last years. A gentleman by the name of Brad Matheny goes into great detail with his simple to understand guide and charts. His financial market research is one of a kind and a real eye-opener. PDF guide: 2020 Cycles – The Greatest Opportunity Of Your Lifetime

CONCLUDING THOUGHTS:

In short, Nat Gas is oversold and showing signs of a bounce. As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly. Take a look at my Wealth Building Newsletter and if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own. Chris Vermeulen www.TheTechnicalTraders.com

Natural Gas Moves Into Basing Zone

After an incredible rally in Natural Gas that our researchers called perfectly in November 2018, another opportunity for an upside price move appears to be setting up for later this year. We believe the current price lows, near $2.30, are setting up for a bounce and then will drop and form a basing pattern near $2.00 before rocketing higher.  It is this last move to the downside which will set up the incredibly deep price base and oversold conditions for the upside price move in late August/September 2019. We’re issuing this research post to alert all of our followers to our research and to allow for proper price rotation for this base to set up and conclude before jumping into any false triggers that may occur on the Daily or Weekly charts. Start by taking a look at this Monthly NG chart showing how extended high price peaks are usually followed by extended price declines.  It is very unlikely that any upside price move will begin before late August or early September 2019. In fact, our data mining utilities confirm this by suggesting that June, July, and August are all typically lower price months by a factor of 1.5:1 and 2:1 mostly over the past 24 years. September is the first monthly data point to break this cycle with a positive historical price bias of nearly 9:1. Therefore, the closer we get to September 2019, the more likely we are going to see a basing in price near $2.00 (or below) and traders would be wise to prepare for this move before it happens.
Our Weekly Fibonacci price modeling system is suggesting a moderate move upward of about $0.25 is likely over the next few weeks before price may rotate lower, again, and attempt to fall below the $2.25 level as it continues to rotate towards the ultimate base. Our researchers believe the ultimate price base will be near $2.00 (roughly between $1.85 and $2.15) as our Weekly Fibonacci modeling tool is suggesting.  After price establishes the new price peak in late June, we’ll have more data to compare for the proper location of the ultimate price base.
This Daily chart highlights our expectations for NG over the next few weeks – fairly strong potential for a move higher, above $2.50, where the price will stall and reverse back to the downside.  Ultimately, this peak will turn out to be nothing more than required price rotation to support the ultimate base pattern setup later in August or September 2019.
Don’t get too excited about Natural Gas just yet.  The setup and future trade are in the process of creating a deep price base that will likely end near late August or early September 2019.  We believe September 2019 will be the breakout month for NG as a price advance really takes hold.  If historical data is any guide, the 9:1 upside bias of September following the 1.4:1 downside bias of August suggests that the September upside price move could push NG prices well above $3.50 or $4.00 very quickly. If you wanna become a technical trader with use and trade ETFs then be sure to join our Wealth Building Newsletter today and get our daily video analysis and swing trade alerts. In the past 17 months, our newsletter trade signals have generated 91% ROI for its subscribers, be sure to join before the markets start making new big moves and profit with us! Chris Vermeulen www.TheTechnicalTraders.com