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Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

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Is Natural Gas Poised For An Upside Breakout?

Natural Gas

My work suggests that the Natural Gas market may be poised for a strong rally this winter. The excessive supply has been trimmed because of the strong demand this summer and as producers cut output. Although we’re likely to see a steady flow of injections during the fall season, if this current monthly chart pattern can hold up, then going into the winter, we may be poised for an upside breakout.

This week, we’re going to take an early look at the March 2017 Natural Gas chart because we want to be able to take advantage of a move that takes place during the winter when demand will likely be higher because of the return of cold weather.

(Click to enlarge)

Technical Analysis

October begins with March Natural Gas futures market in an uptrend according to the monthly swing chart. The trend has been up since April when a rally took out a top at $2.953. The uptrend is going to resume when $3.422 is taken out. And will change to down when $3.111 is violated.

The main range is the June 2014 top at $4.606 to the February 2016 bottom at $2.468. Its retracement zone at $3.537 to $3.789 is the primary upside target.

The short-term range is $2.468 to $3.422. Its retracement zone is $2.945 to $2.832. This will be the primary downside target if the selling pressure is strong enough to take out the $3.111 main bottom.

Based on the current price at $3.367, the nearest Gann angle target is the downtrending angle $3.486. The nearest…

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