| Posted by Brian Fletcher on 05/02/2019 | 0 Comments |
Natural Gas is setting up for a low in the coming days to several weeks.
Upside potential is double the entry with a very favorable risk to reward skew.
Entry levels into UNG using Natural Gas as a proxy for the entry.
While Natural Gas might not be the typical investment that most follow, the chart pattern is setting up for huge upside in 2019. If low risk to high reward is what you aspire to with your investments, then don’t ignore what is happening in NG. In this article I’ll discuss the overall pattern off the 2016 low in NG and the entry levels and upside targets.
First, let’s look at the larger overall pattern in NG off the 2016 low – see NG Monthly Chart below. Overall price targets for NG in a diagonal off the 2016 low is an upside price of $8.385 - $9.869. However, this is VERY long term, so let’s focus on each leg of the move in order to offer some practicality in how one would go about using this chart pattern to make real profits.
Natural Gas Monthly Chart
Next, let’s refer to the NG Daily Chart below. What is most notable is the move up off the 2016 low in a class ABC structure, where the size of the C-wave was equal in length to the size of the A-wave, hence it having hit the 1.0 (yellow horizontal line) almost to the penny before reversing strongly in a corrective move off this high that occurred at $4.945 in November, 2018. This move up best counts as an initial wave (1) in a very long term diagonal. Wave (2) targets the $2.50 - $1.99 region.
Since diagonal counts move in 3-waves vs. 5-wave, what will come next, after the completion of wave (2) is another A-wave that will most likely challenge the November 2018 high at $4.945. This is the high confidence leg we are focused on in 2019, as presented on the NG Daily Chart.
So, in summary, we’re looking for an entry into natural gas in the $2.50 - $1.99 region followed by a move up to the $4.945 region for a potential double in price.
To take advantage of this move up, investors can utilize shares of United States Natural Gas Fund, LP (NYSE:UNG). During a portion of the move up, those who want to add some leverage to their position can utilize shares of VelocityShares 3x Leverage NG (NYSE:UGAZ).
The initial A-wave of (1) took 9-months to complete, having commenced in March 2016 and completed in December 2016, therefore this opportunity can easily complete in 2019.
Natural Gas Daily Chart
Conclusion
For our investors and subscribers, we are looking to go long shares of UNG to capitalize on the move up in natural gas. Lower price targets are $2.50 - $1.99, with upside of $4.945 for an increase that is roughly double the entry price.
