EW analysis natural gas - Two more lows and then doubling
A little idea how gas could continue in the short to medium term. I think that we are still in a wave 3 down. The current recovery from the lows would be wave 4 of that 3rd wave one degree lower. After the end of this 4th wave at 2.66 or max 2.86 wave 5 will see new lows. After that wave 4 of the intermediate degree would lead to almost a doubling to around 4 USD.
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Due to the strong move to the upside it might be time to consider alternatives. As you can see in the comments section I still favor the above triangle count until the MoB at 2.610 ist not broken.
Should the MoB be broken I would expect an even broader triangular structure to form.
There is only a very, very, very slim possibility that the move to the downside is already finished for this would call for a truncated 5 and a very nasty looking leading diagonal.
The risk-reward potential to the downside is not that great, so I would rather await clear signals, that the downward movement is finished and the wave 4 into the region of 4 USD underway. Never underestimat a complex correction.
Should the MoB be broken I would expect an even broader triangular structure to form.
There is only a very, very, very slim possibility that the move to the downside is already finished for this would call for a truncated 5 and a very nasty looking leading diagonal.
The risk-reward potential to the downside is not that great, so I would rather await clear signals, that the downward movement is finished and the wave 4 into the region of 4 USD underway. Never underestimat a complex correction.
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NG seems to stick to the plan. We should then soon see another upward leg back into the region 2.6.
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As PriceActionHelp indicated in the comments section wave 4 actually developed as an WXY, not a triangle. Wave 4 ergo ended tuesday at 2.623.
Now it is time to calculate targets for the final down move. A reverse fibonacci measurement and the Fibo-Expansiven both indicate a target around 1.96 so here is a cluster. Another target is at 2.11.
As this was most probably accumulation I would expect a swift spring with lower volume.
Now it is time to calculate targets for the final down move. A reverse fibonacci measurement and the Fibo-Expansiven both indicate a target around 1.96 so here is a cluster. Another target is at 2.11.
As this was most probably accumulation I would expect a swift spring with lower volume.
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Another common measurement is wave 5 = wave 1. In this case I think that wave 3 is the extended wave.
Wave 5 = Wave 1 would be at approximately 2.14
Wave 5 = Wave 1 would be at approximately 2.14
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It is time to send in the bottom search crew. My guess is that we are not far from a major bottom in NG. Unfortunately I don't have the CoT-Data to verify that.
A target cluster is forming around 2.1 USD.
We should closely watch the behavior of gas in that vicinity.
But a clear warning. Normaly commodities extend in wave 5. I think that in this case wave 3 extended when seen in relationship to wave 1. But still we have to keep this possibility in the back of the head.
A target cluster is forming around 2.1 USD.
We should closely watch the behavior of gas in that vicinity.
But a clear warning. Normaly commodities extend in wave 5. I think that in this case wave 3 extended when seen in relationship to wave 1. But still we have to keep this possibility in the back of the head.
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Express Update.
Possible Bottom in.
Possible Bottom in.
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Another short update.
If you were not on board at the bottom I would now wait for a retracement.
Should the upmove be just another correction in the downtrend, then I would expect it to stop at the extreme of the preceding wave 4 and reverse sharply.
Up till now everything looks very impulsive. So I'm quite confident, that the bottom is in.
But I soon expect a reversal in wave 2. This should now be a great opportunity to enter at lower prices.
If you were not on board at the bottom I would now wait for a retracement.
Should the upmove be just another correction in the downtrend, then I would expect it to stop at the extreme of the preceding wave 4 and reverse sharply.
Up till now everything looks very impulsive. So I'm quite confident, that the bottom is in.
But I soon expect a reversal in wave 2. This should now be a great opportunity to enter at lower prices.
Today's price action hints to the possibility, that wave 4 indeed ended an february 08 (see Armenco's comment). Due to the steep wave 2 and the ensuing steep correction I would still prefer a more complex correction.
At the moment my favorite count would be a triangle wave 4 that allows for an extended accumulation phase to prepare for a future doubling of gas prices.
Another hint, that the correction could carry on, is the fact that we see a divergence in the OBV indicator.
I will keep a close eye on gas.