Natural Gas: Historic Triple Decade Support Level

2월 16일

Historic Price Opportunity:

• NG1! (Natural Gas) is at a crucial level, with prices hovering at a point not consistently broken since a monthly close in July 1995. The weekly chart reinforces this, showing rare closures below this threshold over the last 30 years.
  

Technical Indicators:

• RSI Bullish Divergence: The weekly RSI divergence suggests underlying strength.
  
• Historical Resilience: This price area has been a formidable support zone.
  
• Sub-$2 Entry: Historically, entries below $2 have been lucrative over decades.
  

Fundamentals at a Glance:

• Electricity's Backbone: In the US, natural gas fuels 40% of electric power, significant against the backdrop of consistent year-over-year growth in electricity consumption since 1950, barring 11 years.
  
• Green Energy Transition: Natural gas stands to gain from the global shift towards cleaner energy sources.
  
• Soaring Exports: Global year-on-year rise in Liquefied Natural Gas (LNG) exports meets increasing international energy needs.
  

Counter-Trend Investing Perspective:

• Every investor has heard at one time that the best time to invest is when something isn’t so hot and trendy. Well, the weather has been hot and because of that nobody thinks natural gas is trendy.
  

Trade Strategy Snapshot:

• Entry: At any level in the $ 1.50s or a firm weekly close above the support zone above $1.60, displaying support confidence.
  
• Target: Volume profile's highest point of control level of approximately $2.70.
  
• Stop: A stop loss at physiological $1.50 or the $1.44 final low before levels not seen since the 1990s.
  
• HODL: A long term holding strategy of greater than a year has historically been successful, where looking for exits along the way has been ideal. As natural gas is a useful commodity this is appealing.
  

Trading involves risks and not certainties; let's navigate the probabilities. Comment with your insights so we can uncover symmetries and diversities of ideas.