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Why This Commodity is Primed to Move Higher
By Jeff Clark, editor, Market Minute
Natural gas looks set up for another rally.
The last time we called for a rally in natural gas was [back in February](. We were looking for a springtime rally. And, as is often the case, we were early on that call.
But, seasonal strength eventually showed up and the price of natural gas finished April about 10% higher than where it was in February.
Since then, the price has come back down again. And, we now have the potential for another rally…
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Take a look at this chart…
This chart has formed a “consolidating triangle” pattern. This happens as an asset’s price makes a series of higher lows and lower highs. And it often leads to a large move in one direction or the other.
Natural gas is approaching the apex of its triangle pattern. All of the various moving averages are coiled together. So, there’s plenty of energy to fuel a big move. And, that move is likely to get started within the next few days.
My bet is natural gas is headed higher.
The price of natural gas often makes a short-term bottom in June. The price starts to creep higher in anticipation of colder weather in the fall and winter months.
If natural gas can break out above the [resistance]( line of its consolidating triangle pattern (at about $1.81), then there’s no real resistance until it gets to the early-May high of about $2.11.
That would be a gain of nearly 20% based on Wednesday’s closing price.
Best regards and good trading,
Jeff Clark
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