VirtualFax

NGAS - potential cup & handle play on the daily chart

FX:NGAS   Natural Gas (Henry Hub)
2 months ago
I suggest the chart is self-explanatory. If the pattern turns out to be a cup indeed, there should be a pull back to form some shape of a handle (often times as a falling flag/triangle), then the price would sharply break out the resistance of the recent high at the cup’s edge level and would head Northbound (or more precisely – North-East).

Obviously, the exact moves are my biggest speculation to-date, but they are all based on the prior action and the resulting logic of the chart. However, regardless of the exact moves, if, again, it’s truly a cup, the eventual target is measured and is typically equal the depth of the cup.

Also, notice that should the price reach its target, another cup might shape out with the new target above NGAS’ previous all-time high.

The last but not the least, please note that this is not a trading advice but an exclusively theoretical exercise with a prohibitive level of uncertainty. Should you decide to take any positions along these lines, it is imperative (solely for your own good) that your trades are based on your OWN analysis.
2 months ago
Comment: This is somewhat different scenario which implies that the whole cup & handle pattern has already been formed. Btw, this is more of a textbook pattern which implies that the right edge of the cup (before the handle started shaping out) topped lower than the left edge. The volume’s behavior also seems to act in favour of this second scenario.

If the price bounces of the top border of the channel and surpasses May 19th 2016 high ($3.101) but a certain margin, there will be even stronger case for this second scenario.

I realize that in this second scenario I’m going against the bearish view on NGAS, expressed by a few very strong traders here but the pattern is the pattern and it recognizes no authorities.

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2 months ago
Comment: UGAZ is another set up with a C&H potential but, obviously, skewed due to the decay. If my logic stands, the price should bounce after testing the upper border of the channel. With a tight stop, that point could be a relatively low risk entry:

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GASL is not quite a cup but is still a bullish falling wedge pattern. In this case the price is expected to bounce off the trendline. The Sep 8 high then becomes the closest TP:

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Bearish charts of the opposites of the the two above, are equally supporting the potential NGAS bullish move.

Sliding channel in DGAS:

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and the rising wedge for GASX in which, even if the price penetrates the resistance line, it is expected neither to break out of the wedge nor to burn through the declining trendline:

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bertcoin PRO
2 months ago
Thanks for the charts! Is it dangerous to do technical analysis on 3x ETF/ETN's vs the underlying? I'm interested in watching the C&H play out in the DGAS though. I need to learn more about that pattern. IMHO the daily (and possibly intermediate) cycles are strong to the down side right now. That's what's keeping me bearish.
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shinsky
2 months ago
Cup and handles are continuation patterns. Nice try bud
Reply
VirtualFax shinsky
a month ago
I'm confused now, aren't you too? Isn't C&H a continuation pattern?...

GDX - Miners story
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