Wednesday, October 21, 2009

Is Natural Gas Ready To Spike?

Natural Gas rose almost 7% yesterday. A forecast for a cold winter was the primary reason. Let's see what the chart says about the move. Click for a larger image on all the charts.

The main problem with the UNG chart is the massive amount of resistance created by resistance lines A and B. Notice that area C shows prices have gotten to these levels before only to be rebuffed.

The above chart shows more detail regarding the resistance. Notice this is the 4th advance into this area since mid-September. Prices simply haven't been able to get above the 11.80 - 12.20 level. This is a very big supply area. The question now becomes is this still a supply area? Or has the recent fundamental news changed the game?