Wednesday, October 9, 2013

Natural Gas Looks Poised for Breakout

Remember back on October 1 when I asked "is natural gas about to make a move?"  Well, check out the chart through Tuesday's close ...

(Updated chart)

You can see that natgas broke that downtrend, just as I expected. Now, it is flirting with the neckline of an inverse head-and-shoulders pattern.  If it moves above that successfully, the minimum target becomes $4.28.

The natural winners in this scenario are those companies that are leveraged to natural gas. Specifically, I would look for companies that have very poor economics below $3.50, and that make a profit above $4.25.

This chart is only through last night's close. Today, natgas is down slightly, at $3.69. You can wait for the breakout or not, depending on your stomach for risk and your appetite for reward.  

Personally, I can't wait until my new publication starts next month. I'm itching to make new recommendations.

Just remember that success is never guaranteed. Do your own due diligence before buying anything.

No comments:

Post a Comment