Theme remains bullish but are longs buying risk here The theme remains bullish for "natty" as we rally off of support after identifying bullish absorption. We can see 3 months of ACCUMLATION here so it difficult to estimate an upside target but we can identify some anticipated levels of resistance at $8.00, $8.30 & $8.80 as well as "gaps" created during the "markdown."
We saw a decrease in cumulative selling following buy our first increase in buying demand since March 2016. Again this looks bullish.
Despite this great "rally" the ease at which prices continue to trade higher is contracting while volume remains pretty constant so I speculate we are seeing some profit taking here. We will like return to $7.00 and shake out weak bulls while assessing how much supply remains available to control before we sustain any more gains.
The volume profile (purple area on the right) defines "value" and is showing that prices are entering a "low volume area." This could allow prices to test the $8.00 level then we can appreciate that prices are trading above "value" and likely encounter shorts and long liquidation. This process of test and retest will continue allowing rotation of the "point of control high" allowing balance to be maintained among buyer and sellers.
MY OPINION: New longs are chasing and entering a trade exposed to downside risk. I would wait for an entry confirming support.
Good Luck!
DGAZ
Natural Gas Forecast Natural Gas has dropped down to the bottom of the channel and is primed for a jump. There are bullish divergences on the hourly wavetrends, the Daily is working to turn up, and the Weekly/Monthly waves are strong. I this to coincide with a minor pullback of USD. My first target point is $2.33, but I'm hoping for it to jump up near $2.6. If it does go to $2.6, the retrace could set up a nice H&S reversal pattern at $1.82.
Short Natural Gas, possible H&S on the DailyI'm not sure why, but Natural Gas just jumped 10%, but the chart looks very bad with major bearish divergences all over. I'm looking for it to jumped up to the $2.180 - $2.200 area and then start to pull back. If it does, it would form a H&S reversal pattern, possibly to the $1.600 area. If the price breaks well above the right shoulder line, this idea should be abandoned.
UNGNatty's bullish close above resistance offers traders well defined risk. It looks like a reasonable 1:10 risk/reward entry here with a lower volume area. The ceiling with the "value area" appears to leave plenty of room to allow prices to continue into resistance. Volume looks good; however, cumulative buying looks weak. If it remains so prices will likely retreat. Trade with a plan and take profits into resistance. Never like holding the "widow maker" long.
Good luck!
The most simple setup you'll see from me - Will it work?$DGAZ with daily double top and daily Outside Bar..
Simple..
Stop loss above 30$
Targets near 24$ and 20$
Counter trend setup
Tomer, The MarketZone
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Slightly Risky Short but incredible downside2 really important RSI horizontal trend lines at the 61.8 level and 32.8 level (also happen to be fibonacci ratios). Every time the RSI crosses above 61.8, HUGE upside. Every time it crosses below 61.8, HUGE downside. Looks like it is about to cross below. CORRELATES with the hourly analysis on DGAZ i just did. Both are saying short. Also, not as important, but every time RSI bounces off of 31.8 the price spikes
DGAZ breaking hourly rsi trend lineBroke trend line and is now retesting. Price will soon start dropping. Great time to prepare for a short.
Natural gas or oil provides more return in this recovery?One of the great feature I like with TradingView is the ability to compare different ticker via arithmetic addition/division/subtraction.
From here, I'm comparing between UNG and USO. Since both are directly related to energy, tough choice huh?
Charting it out helps a lot and we can see a clear breakout trend between the ratios!
Clearly Natural Gas (UNG) might possibility provide the best return for your money on energy as compared to Oil (USO) over the long run.
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** Note: USO have been severely under performing since 2008 after the recovery of oil price due to the price difference between each month's oil futures contract. It will not be a clear reflection of the actual market.
This is only if you're considering between USO or UNG. Try it out by charting other ETF/ETNs/stocks by yourself!