Natural Gas Begins Upside Breakout Move

First, we want to say “It took long enough,” and we’re happy to see this upside move in natural gas. We had been calling this move for many months. Our predictive modeling systems and cycle systems suggested the extended bottoming formation in natural gas was an excellent opportunity for skilled technical traders.

Today’s big move suggests the downside price pressure is dissipating and a new bullish price trend may push natural gas prices above $2.85 quickly.

The upside move in late April 2020 was a cycle move that we expected to continue a bit higher. It still presented a very nice opportunity for traders to capture a 35% upside price swing. The current, deeper, price bottom near $1.43 represents a very deep rotational bottom in natural gas, and the current upside price move may just be starting. Our researchers believe the initial target for this move is $2.85. After that level is reached, if the trend continues, a higher target near $3.65 could become a very real price target.

NATURAL GAS RISE IS STARTING EARLY

Historically, August has not been an impressive month for natural gas. Over the past 24~25 years, August represents a muted average upside range of $0.52 and an average downside range of -$0.73. These monthly historical cycles suggest an almost even split, with 12 months moving higher and 13 months moving lower. Yet, when we move to September, things change.

September, on the other hand, has historically presented a very strong upside potential in natural gas, with an average upside range of $0.69 and an average downside range of -$0.22. This suggests the upside potential in September is nearly 300% larger than the downside potential.

Additionally, over the past 24 years, natural gas has moved higher 16 months and lower only 8 months. This suggests the upside price rally in September is nearly a 2:1 certainty.

Quite possibly, the extended bottoming formation in natural gas over the past three months is setting up an early rally mode where price levels may move towards our $2.85 price target, then stall headed into September. Once September arrives, natural gas prices may begin another upside move, pushing well above the $3.50 level.

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Disclaimer: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.It is provided for informational and ...

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