{"id":168284,"date":"2020-04-07T10:00:21","date_gmt":"2020-04-07T14:00:21","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=168284"},"modified":"2020-04-07T07:51:52","modified_gmt":"2020-04-07T11:51:52","slug":"is-natural-gas-ready-for-an-april-rally","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/04\/is-natural-gas-ready-for-an-april-rally\/","title":{"rendered":"Is Natural Gas Ready For An April Rally?"},"content":{"rendered":"
April 7, 2020<\/div>
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By TheTechnicalTraders<\/u><\/a> – <\/strong>Our researchers have been following Natural Gas for many months and believe the current price level, near $1.65, is acting as a continued historical support level (a floor in price).\u00a0 Our researchers also used one of our data mining tools to attempt to identify if any opportunity exists in NG over the next 30 to 60+ days for skilled traders.\u00a0 The purpose of this data mining tool is to explore historical price activity and to determine if there is any true price \u201cbias\u201d that exists within certain months.<\/p>\n

For example, if we could determine that Natural Gas tends to rally in April by a 2:1 ratio (historically) and that the rally in NG is typically somewhere between $0.50 and $1.50 to the upside, then we could attempt to use this information to set up a trade that allows us to attempt to profit from this potential future trend bias.\u00a0 A 2:1 ratio would indicate that, historically, the price rallied 10 times and didn\u2019t rally 5 times over a span of 15 instances.<\/p>\n

Our data mining utility reported the following data for April, May, and June in Natural Gas.<\/p>\n

Monthly Natural Gas Price Chart<\/h3>\n
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If we look at the APRIL data, the POS bars = 17 and the NEG bars = 8 \u2013 that sets up a slightly greater than 2:1 ratio of advancing price over declining price in April.\u00a0 The \u201cTotal Monthly Sum\u201d across 25 instances of data is $1.12 whereas the Average for the POS price activity comes to just $0.24.<\/p>\n

This suggests that in April, we have a fairly high opportunity for some upside price activity in Natural Gas based on this data \u2013 a nearly 2:1 advancing price ratio (historically).\u00a0 Yet it also means that advancing price may only rally $0.35 to $0.75 from any price bottom \u2013 so we have to be aware of risks that may exists with a small price advance from the current low levels.<\/p>\n

If we take a look at the MAY data, the POS bars = 13 and the NEG bars = 11 \u2013 that sets up a 1.18:1 ratio that suggests a very slight advantage to the possibility that continued upside price activity will happen in May.\u00a0 Yet, the upside price advantage shown my the \u201cTotal Monthly Sum\u201d data suggests a very big opportunity for a breakout rally in May (+$2.40).\u00a0 The way I interpret this data is to understand that May is roughly 60\/40 biased to the upside whereas if any upside move takes place in April, a continuation of that trend in May could be incredibly profitable with a proper strategy.<\/p>

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Take a look at the JUNE data and try to come up with an interpretation yourself.\u00a0 The POS bars \/ NEG bars represent a less than 1:1 ratio.\u00a0 The Total Monthly Sum ($0.21) is not a very substantial price advance.\u00a0 The data is somewhat indecisive or inconclusive in suggesting any real price advantage in June for trading.<\/p>\n

Yet, we have a very clear advantage in April and May.\u00a0 So, how are we going to approach this trade setup?<\/p>\n

Weekly Natural Gas Chart \u2013 Cycles & Support<\/h3>\n

Currently, NG is testing very deep price levels within the BLUE support range box.\u00a0 Aggressive traders can attempt to look for opportunities within this range but must understand risks are still high for continued moderate price decline before a bottom sets up in April.\u00a0 Skilled traders would wait for the bottom to set up and possibly look for opportunities in ETFs as a means to limit risks on initial positions \u2013 attempting to scale into the trade comfortably.<\/p>\n

Once the rally in NG really sets up and breaches the $1.98 level moving higher, then we believe we have a very real rally on our hands that may see price levels back above $2.75 eventually.\u00a0 The $1.85 to $1.99 price level will act as resistance as price attempts to move higher.<\/p>\n

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Before we continue, be sure to\u00a0opt-in to our free market trend signals<\/strong>\u00a0<\/em>
\nbefore closing this page, so you don\u2019t miss our next special report!<\/em><\/p>\n

Why are these types of setups so important to skilled traders?\u00a0 Historical price structures and patterns, like this data mining pattern, help to clearly illustrate strategic advantages in certain markets for skilled traders. Determining how to set up a proper trade knowing this data is also important.\u00a0 Risks exist with every trade you make and I\u2019m sure we\u2019ve all learned a lesson or two about making a hasty trade and not thinking about it?<\/p>\n

Our research team believes April and May 2020 could be very exciting for Natural Gas.<\/p>\n

As a technical analyst and trader since 1997, I have been through a few bull\/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders.<\/p>\n

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts visit my\u00a0Active ETF Trading Newsletter<\/strong>.<\/p>\n

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade\/position.<\/p>\n

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my\u00a0Long-Term Investing Signals<\/a><\/strong>\u00a0which we issued a new signal for subscribers.<\/p>\n

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.<\/p>\n

Chris Vermeulen
\nChief Market Strategies<\/p>\n

TheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By TheTechnicalTraders – Our researchers have been following Natural Gas for many months and believe the current price level, near $1.65, is acting as a continued historical support level (a floor in price).\u00a0 Our researchers also used one of our data mining tools to attempt to identify if any opportunity exists in NG over the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-168284","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/168284","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=168284"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/168284\/revisions"}],"predecessor-version":[{"id":168288,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/168284\/revisions\/168288"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=168284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=168284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=168284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}