Market Scheming

Wednesday, August 18, 2010

Nat gas prediction

I have not touched nat gas for a while.
Looking at the charts I see a very interesting pattern.

the triangle was broken to the downside.  The channel it has been trading in between the cyan and purple lines should provide support resistance well. That is why i expect a pop in prices to the 5.60-5.70 area on the HNU then a break down with that triangle providing strong resistance.  However any break down below the Cyan line will be shorting opportunity for Nat Gas.

Volume seems to favor bears right now with heavy volume dumping this.
The slow stoch is oversold so expect a pop at some point and a logical place is right now after the first bounce off the cyan line.

The MACD has a less negative tick meaning there may be a small turning point in momentum possibly to test the target range of 5.60-5.70.

This is what i would consider a low risk trade since a stop loss just below the cyan line will provide a no brainer exit point.  and the upside potentional is pretty good.  However this chart is bearish and you would be playing a bounce.   When this peaks and if it bounces off that bottom triangle trend line, it could be a good time to load up on HND.


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