Natural Gas

click charts to enlarge

The charts above are of the daily November Natural Gas and the monthly Natural Gas futures contract.

While there has been an incredibly steep decline after reaching a high point in July of 2008 Natural Gas appears to be signaling it may be ready for at least a retracement bounce of some amount. There is an upward reversal showing on the daily chart with the possibility being set up on the monthly. The weekly does not display this same pattern, however.

It also appears to us that the structure of the move off the low as seen on the daily chart has the potential of producing further upward thrust. We are including here what we said in this week’s Trade Focus which was written yesterday the 10th. The market has already moved somewhat away from our price suggestion and actually has approached some of its first levels of resistance, but Natural Gas is known to be volatile. We will be updating on this situation as it progresses.

From Trade Focus - Sept 10th
Natural Gas (Nov.) – This is a new market we are adding this week. It appears that there has been a reversal off the recent low on a daily basis. It is a bit more pronounced on the October contract but the October is due to expire September 28. This tends to be a rather volatile market, perhaps even more so than crude oil; therefore it may not be for everyone. But after a prolonged down trend it appears natural gas is showing signs of at least placing a temporary bottom. We believe we can suggest that long entries can be initiated at a price level of 4025 or lower and that stop protection should be intraday penetration of 3765. Retracement resistance levels are approx.: 4114; 4308; 4503. The next series above is approx.: 4252; 4495; 4738. Since this has been such a steep decline over many months there will be additional levels above the market that will be stated here as they approach.

If interested in joining the weekly Trade Focus email list so that it will reach you by Thursday afternoon let us know. We will be happy to oblige.

As always, send any comments or observations to jmajer@mfglobal.com.

If you need to establish your trading account you can contact us directly at the email address above or click on this link:

http://www.cbandsbrokerage.com/openanaccount.html

Or call:
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800 321-5810

Jeff Majer
Diego Pilar
CB&S Division

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.