Tuesday, August 27, 2013

Watch For A Move In Natural Gas

Natural Gas has had a quiet year in terms of headlines. In 2011 and 2012 it was heavily tracked as it collapsed in price below $2.00 and as it popped hard all the way to $4.00. However, since topping out in mid 2013, natural gas has been on the decline since then as it fell all the way to almost $3.00 just a couple of weeks ago. However, one thing I noticed is that there has been a fairly orderly decline ever since natural gas put in its double top in mid 2013..
The Chart
Below is a daily chart of Natural Gas ($NG_F) futures. As you see, the selloff has been pretty orderly. No major pukes and it has been channeling on the way down. What I’m watching for here is a break above the channel (to possibly play it on the long side) or failure/a hold at the channel (to play it on the short side). The channel might not be the cleanest one I’ve ever seen but it’s there.
(There’s no guarantee I take a position, but it’s going to be interesting to watch to see how this resolves.)
Natural Gas

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