The widowmaker

This is a more of a watchlist post for natural gas. We would like to add a disclaimer out front.

Natural gas was a major loss for us last year and we ended selling for a tax loss. So our record is nothing to be proud of in this commodity. This commodity is also a graveyard for quite a few hedge funds and is a huge, huge volatile market. So as everything else, take it for FWIW.

We take a look at two charts a long term monthly chart of 20 years and a daily chart of 1 year.

As seen in the monthly chart, natural gas has an upward sloping trendline from 15+ years coming in @3.2 region. We believe natural gas could bounce of that level. The daily chart shows an EW labelling (there is probably another way to label the subdivisions), but the take away is we are in the final throes of the downtrend for now. The seasonal chart above shows natgas usually bottoms in july. So we will keep a lookout nevertheless.

Ofcourse, divergences have been showing up for a long time in this market. While this is definitely a setup, we need a timing trigger to log a buy in, probably a bullish MA cross or a weekly/2 consecutive closes above the 50 d MA, which has proved to be natgas' trendsetter.

We are keeping this on our watchlist as the commodity has been selling off without a bounce for an year now. The coming rally could be vicious.