Tech Guy Weekend Comments 3/5/23
April Natural Gas has printed a definitive V bottom - straight down and up, with the low being on February 22nd. Two days later, April gas jumped up and marked a break-away gap, telling us that an urgent uptrend was beginning.
A look at October Natural gas has that same February 22nd low, and it is also in a sturdy uptrend. Friday, was a breakout (acceleration) day which closed at 3.56, so there is a chance gas will backfill to Friday's open (the breakout point) at 3.37, or to the lower red line at 3.25 (see chart below), but this is not a guarantee, and the up move could continue with very little setback.
Where is October Natural Gas going? Higher.
How high and when? See below.
The last down correction began from about 5.45 on December 15th and lasted until February 22nd at the price of 2.76. This is about 9 weeks in duration. The first resistance area is around the 4.20 area where a backfill should occur but I don't know how far it will sell off from 4.20.
Because we know this is a strong uptrend (breakaway gap), there is a greater probability that NG will keep rallying to the December highs at 5.45, or even 6 bucks, as opposed to reversing down from the 4.20 gap area.
If Natural Gas runs all the way back to 5.45, as expected, or 6.00, it would take 12-15 weeks from Feb 22nd (the 1.38 & 1.5 Fibonacci of the 9 weeks down) to retrace all the way back up. Also, there is a balance line pointing to about 6.00 that you will see on the chart.
To summarize: rally to 4.20, backfill to ??, rally to 5.45-6.00. Take a look at all these details and prices on the October Natural Gas daily chart. There are possible areas where bumps (small pullbacks) will occur - these are the red horizontal lines.
May Soybeans painted a dragonfly doji on the weekly candlestick chart last week. Monday's open and Friday's close were almost the identical price. This happened because soybeans sold off sharply beginning Sunday night, accelerated down on Tuesday, opened higher Tuesday night and began rallying until the close Friday.
This action is also called a V bottom which occurred because the buyers were able to absorb the selling and eventually overcome them - the bulls won the week. Along with other factors, the dragonfly doji usually signals a further rise in price. Beans should at the very least rally to test the 1550 area during next week's trade.
It is also noteworthy that on the continuation chart, beans remained within the big trading channel. Check out the May Beans weekly chart first, then the day continuation below that.
May Corn's Wednesday V bottom held up as a ledge was built above and along the 630 area on Thursday and Friday. I expect corn to rally fairly straight up to at least test the 680 area before any significant backfilling occurs because the selloff on the left was virtually straight down. The 680 level is the bottom of the triangle corn sold down from. Check out the daily continuation corn chart.
Wheat and crude will be picked back up on Monday.