The natural gas market may be forming a bullish reversal pattern similar to the reversal that occurred in 2012.
In 2012, the natural gas market bottomed out in late-April low of 1.902 rallying higher by 45% over the following 4 weeks.
The rally in 2012 was then followed by a 4 week set back that dropped the spot market by 21% from the 2.759 high to an eventual low of 2.168 before bottoming. Once the market bottomed for a second time, a longer term rally back higher unfolded.
In 2015, a spot contract low set the first week of May at 2.443 was followed by a 4 week rally which lifted the spot price by 27% before topping at a 3.105 high. A three week sell off from the May high has dropped the spot July 15 natural gas contract lower by 18% before bottoming out last week at a 2.556 low.
Last week's low was technically important as it held above the 2.443 low set in April. If the natural gas market closes higher on a weekly basis this upcoming Friday, it could indicate a bullish "higher low" has formed similar to 2012. It could also indicate a long term low has been set in the natural gas market.
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