natural gas – Andrew Thrasher

Can The Advance In Natural Gas Last?

Posted on March 18, 2013 by Andrew Thrasher, CMT

Natural gas has been enjoying a nice advance so far in 2013 even outpacing the rally we’ve seen in U.S. equities. However there appear to be some headwinds moving in on nat gas ($UNG). This is the topic of my TraderPlanet piece for this week.

Here’s a blurb:

As the chart below shows, we have a falling trendline that was created from the lower lows in October and November of last year that would act as resistance just above the $21.50 level. We have another trendline that started in April of last year that become resistance during the first month of 2013 and is coming into play near $21.50 as well. Looking at the natural gas market Monday morning it appears we will open above this level. I’ll be watching for a close on strong volume in order to trust any form of a breakout.

Click over to read the rest: Nat Gas Bulls Push $UNG Up 12% YTD, Can It Last? (TraderPlanet)

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+.

Will Natural Gas Bounce?

Posted on December 18, 2012 by Andrew Thrasher, CMT

Natural gas is the lone wolf of the commodity world, setting out on its own course while for the most part ignoring what the rest of the capital markets are doing. Short-term traders are often drawn to the high volatility of the nat gas market, rising and falling by greater degrees than just about any other commodity.

From the low in April, natural gas has risen nearly 70%, even taking into account the recent bout of weakness that’s forced the commodity to fall nearly 15% since mid-November. But recently we’ve seen the United State Natural Gas Fund ETF ($UNG) fall to a support line that’s been created off the April and June lows. Ideally we’d like to see a trend line tested at least three times in order to gain greater confidence in its ability to hold, but so far we’ve seen a slight bullish bounce in $UNG off the trend line that sits near $18.50.

Turning our focus to momentum we have one of my favorite indicators, the Money Flow Index (MFI) breaking down to a historically oversold condition. From a break below 20 we look for one of two things to occur. 1. a bounce from being oversold as buyers step in immediately and 2. price gives us a false break of the trend line and puts in a positive divergence in momentum that takes $UNG higher. These of course are not the only possibilities that could play out, but one of these are what natural gas bulls will likely be hoping to happen.

As I mentioned in the second option for the MFI indicator, we could see a break of the trend line. If this happens we obviously won’t be able to tell if it’s a false break until price action plays out and $UNG rises back above support. On a break we can look at volume and tell if it occurs on a heavily selling which would give a credence to further weakness or on light volume which would support the notion of a false break.

Follow Up on the Aussie and Nat Gas

Posted on September 6, 2012 by Andrew Thrasher

Today I wanted to look back on some of the charts that were discussed in the last few weeks.

First up is the Australian Dollar, which has been falling for a couple of weeks. On August 21st we looked at the rising channel that the Aussie had created as well as the sideways action in momentum based on the RSI indicator. We saw momentum and price breakdown, taking $XAD down almost 3%. From here, momentum has flipped over and is approaching a level that has shown $XAD to be oversold, we’ll see what happens if and when it gets there. There is still some fundamental impacts that could affect the price action in the Aussie Dollar as the RBA considers taking action to help prop up their struggling economy.

Next up is natural gas. We’ve been watching the ping-pong match happening between the 50-day and 200-day moving averages. We had a slight break below the 200-MA before we see the spot price of nat gas bounce back up to its 50-day.

The Moving Average Battle Taking Place in Natural Gas

Posted on August 28, 2012 by Andrew Thrasher

I think the setup presently occurring in natural gas is pretty interesting, as you can see from the chart below the commodity is currently bouncing between its 50- and 200-day moving averages, hitting the 50-day as resistance and finding the 200-day as a support almost on a daily basis over the last week.

I last addressed nat gas and its moving averages on August 13th when I talked about whether these two averages could hold as support, although I was seeing negative divergences in momentum and money flow. So far, it appears the 50-day was not strong enough to fight the divergence but the 200-day MA is doing its best to hold on. It seems there might be a little more weight leaning on the downside from here, but any positive news we get on Friday from Jackson Hole could shift the playing field.

Natural Gas Support

Posted on August 13, 2012 by Andrew Thrasher

Natural gas appears to have found its 50- and 200-day moving averages. It’ll be interesting to see if these can hold as support after the commodity had a nice rally since mid-June. Looking at momentum and money flow, both the RSI and MFI had been negatively diverging from price but have not reached what have previously been ‘oversold’ levels.