Natural Gas printed a potential exhaustion candlestick on Friday. That doesn't make me nervous. There are still a lot of shorts in NatGas. We have plenty of time to run... (If it bottomed we can rally for 2 years...)
We are above the 10 EMA. We are above the 20 EMA. We closed above the basis of BB (it usually means we are going to reach the upper Bollinger Band) MACD, TSI crossed over. 10 EMA , 20 EMA wants to cross over soon.
Volume is increasing since the trendline break. Shorts are still sitting in their positions , but the commercials' long positions are increasing (We are above 400.000 in com long contracts)
Next level to be tested: 1.950 At 1.950 is: 50 EMA, upper BB , and the 2016 Feb breakdown level. If we have a pullback the maximum we can come down is the 10 EMA (1.7537 on Friday)
One more thing : forget the seasonality in NatGas! NatGas can rally during the spring or summer season.
THIS IS JUST BEGINNING. THERE IS A HUGE POTENTIAL. (200%) I HAVE NATGAS IN MY PORTFOLIO. I HAVE UGAZ IN MY PORTFOLIO.
Comments
BoyPlunger91
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I believe GASL is FCG x3. I have actually found a stronger corrolation of gasl to the oil price then gas. I am confused, you said UGAZ may run during consolidation but how does that make sense? UGAZ is 3x a NG futures contract, not shares. Are you saying UGAZ will recieve high inflows due to increased performance of gas shares? Thanks for clarifying
chartwatchers
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GASL : The Fund seeks daily investment results of 300% of the performance of the ISE-Revere Natural Gas Index.
But true : there is a significant correlation between GASL and oil price.
BoyPlunger91
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Hi Mate,
Love your work. Can you please help me find a link to shorts of Natural gas? Were are you finding this contract data?
When you say you have NATGAS in your portfolio, Do you mean futures contracts or are you using an ETF? I hold UGAZ but am concerned about the daily re-balancing & decay.Your thoughts? I also hold UNG & FCG Calls
chartwatchers
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Hi,
I'm buying US Natural Gas May. It's a CFD. And I entered onMonday into GASL it's a 3x etf.
UGAZ is very good. You just have to look to jump out at the end of its intermediate cycle which is weeks from now.
Natural Gas has at least 1-2 more week to run (and maybe 3-4) and price stabilizes at a higher level. UGAZ will run a lot when NatGas is consolidating for weeks or months.
Because the NatGas related companies (UGAZ) price will go up : higher gas price , better performing gas companies.
The same in oil. If oil starts to consolidat at 40-50$. You cant make money in oil. But you can make a big money in ERX and individual shares: OAS, HK , BAS, EXXON etc...
R.Marcel
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YEP! agree, spring is comming(farming) more demand.
thx for the chart,i'm also thinking of stepping onboard.
cheers.