A
lot of North American natural gas producers had a pop last week and we wondered
if the advance just a sucker rally or, are we into the early stages of a new
bull market in the natural gas complex?
Our
weekly plot of a continual the natural gas (NYMEX) futures contract displays an
inverse Head & Shoulders (H&S) pattern along with a relative perform
spread vs. the price of crude. It is important to see there are two unrelated studies
displaying bullish signals for natural gas
Just
to review some inverse H&S rules
1)
The left shoulder (LS) is usually larger in time than the right shoulder (RS)
2)
The LS usually is accompanied by higher volume (not shown) than the RS
3)
When drawing the neckline always extend it to (2)
4)
The initial neckline breakout is measured from the lower RS to the peak at (1)
5)
The price will usually decline from (1) back to (2) or support at the neck line.
6)
The major move is measured below and above the neckline from the low of the
head (H) to the peak at (3)
7)
Finally – the bigger the pattern in time the better – this one spans over 6-months.
Posts
4 comments:
why not FCG?
it's been doin OK
For Anonymous: Yes we need US and CDN Barrick above $31.50 to get a positive turn on the gold miners – the junior producers are looking better. On money flow I use a blend of OBV and Accumulative Distribution and only act if they trend together – if they diverge it is a false move
For Yogi: I do study the NASDAQ Comp and the NASDAQ equal weight and find no good divergence signals – the Apple mess has some impact – but not material
For dh12: Yes I see the Transports breaking to the upside with the Industrials – the only problem now is the transports are trading more like the industrials and the divergence study is lost for now. That natural gas bottom is an inverse head & shoulders pattern
For Edmagee: Again that natural gas bottom is an inverse head & shoulders pattern and traders could use the HNU or just buy selected natural gas producers and don’t forget the BMO ZJN
For Piazzi: Yes the FCG is OK for U.S. $ accounts
Thanks to all: Bill Carrigan
Bill,
the volume on ZJG is very lean. isn't that a concern?
Hello Piazzi
The BMO ZJG is an open ended trust and so there is always a bid or offer close to the value of the basket of stocks held in the ETF
Liquidity is not a problem
Bill C
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