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.
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Chris Vermeulen
www.TheTechnicalTraders.com