Natural Gas price has declined from the 7th of June 2022 in a sharp I wave movement.
The candlesticks of early June confirmed the reversal, with the formation of an Evening Star pattern.
A bearish reversal can be seen with
1. Kumo - twist and price below Kumo.
2. TK Dead Cross
3. Chikou Span below price.
From a retracement perspective the downtrend has moved to a mid level between .50 and .618 retracement level.
I am wondering whether price will rally next week.
Reasons for this
1. The Bearish Kumo is small and thin. This alone is a factor in favour of a reversal of price.
2. The TK cross was above Kumo and has lesser weighting as a bearish signal.
3. Chikou Span - also crossed price above Kumo, so it too has lesser weighting as a bearish signal. Further more , it has just entered the Kumo.
It would have a greater bearish tone if it wear to break the Kumo down.
4. Price "Too Far" from Kijun Sen . If we look to the past uptrend, when price escaped from Kijun Sen by 1.45 = 1.55 ( 2.5 ATR) , it has reversed back to this equilibrium point on 3 occasions.
The Friday close is 1.55 from Kijun Sen , and soo it is too far from the equilibrium.
5. Doji - the last daily candle was a Doji. This reflects a market where buyers and sellers are balanced. A bullish candle would be required next week, to setup a Morning Star .
From a Time Cycle Perspective , the upcoming Kihon Suchi day of 17 may see the market turn. Possibly in the early part of next week the market consolidates between 6.00 and 6.40. Then at the end of the week commences a retracement.
Where could price retrace to ?
The buyers may come back into the market driving price to
1. Resistance Level - 6.400
2. SSA Level - 6.700
3. Kumo - into the middle of the cloud around 7.40 ( Tenkan Sen)
The candlesticks of early June confirmed the reversal, with the formation of an Evening Star pattern.
A bearish reversal can be seen with
1. Kumo - twist and price below Kumo.
2. TK Dead Cross
3. Chikou Span below price.
From a retracement perspective the downtrend has moved to a mid level between .50 and .618 retracement level.
I am wondering whether price will rally next week.
Reasons for this
1. The Bearish Kumo is small and thin. This alone is a factor in favour of a reversal of price.
2. The TK cross was above Kumo and has lesser weighting as a bearish signal.
3. Chikou Span - also crossed price above Kumo, so it too has lesser weighting as a bearish signal. Further more , it has just entered the Kumo.
It would have a greater bearish tone if it wear to break the Kumo down.
4. Price "Too Far" from Kijun Sen . If we look to the past uptrend, when price escaped from Kijun Sen by 1.45 = 1.55 ( 2.5 ATR) , it has reversed back to this equilibrium point on 3 occasions.
The Friday close is 1.55 from Kijun Sen , and soo it is too far from the equilibrium.
5. Doji - the last daily candle was a Doji. This reflects a market where buyers and sellers are balanced. A bullish candle would be required next week, to setup a Morning Star .
From a Time Cycle Perspective , the upcoming Kihon Suchi day of 17 may see the market turn. Possibly in the early part of next week the market consolidates between 6.00 and 6.40. Then at the end of the week commences a retracement.
Where could price retrace to ?
The buyers may come back into the market driving price to
1. Resistance Level - 6.400
2. SSA Level - 6.700
3. Kumo - into the middle of the cloud around 7.40 ( Tenkan Sen)