By Dean Rogers, GM & Senior Analyst, Kase and Company, Inc.
August natural gas pushed to new highs Tuesday and early Wednesday before stalling at $2.974. Cooler than previously expected near-term temperature forecasts are reportedly the culprit for Wednesday’s pullback and settle at $2.863.
Longer-term, the outlook for natural gas is positive and is most likely forming a five-wave trend. The move up is due for a significant correction to form a potential Wave IV. Momentum is setup for bearish divergence. The Stochastic has also crept its way below the overbought threshold.
Charts show that August natural gas met a cluster of important wave projections at $2.974 Wednesday morning. The most significant was the 1.618 projection of the primary wave $1.99 – 2.494 – 2.157. It is rare for a primary wave such as this to extend beyond the 1.618 projection without a significant correction first.
The pullback from $2.974 forms a daily shooting star. This reversal pattern would be completed upon a close below Tuesday’s $2.82 midpoint and confirmed upon a close below the $2.751 open. This would then open the way for $2.66, the 38 percent retracement from $2.157 to $2.974.
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About The Author
Dean Rogers is the General Manager and Senior Analyst at the Kase Call Center. Dean began his career with Kase and Company, Inc. in early 2000 as a part-time programmer. Early in his career with Kase, Dean wrote programs and modules to help expedite and automate parts of Kase’s internal forecasting and hedging systems. He also worked extensively with the Kase StatWare® trading indicators. With this work, he quickly became passionate about the markets, and in particular, technical analysis. Dean’s new found market enthusiasm, along with his strong work ethic and dedication to Kase and its clients, resulted in him becoming Ms. Cynthia A. Kase’s protégé and ultimately her “right hand man”.
Dean oversees all of Kase’s day-to-day operations and writes Kase’s award winning weekly and quarterly crude oil and natural gas forecasts. He also teaches at Kase’s technical analysis and energy risk management courses, manages all programming and development, and collaborates closely with Ms. Kase in developing new software and carrying out quantitative analytics research.
Dean is a member of the Market Technicians Association, has been quoted in numerous publications including the Wall Street Journal®, Bloomberg® and Reuters® publications, and Black & Veatch’s® Cap Markets Report. He has also been published in Technical Analysis of Stocks and Commodities® magazine and contributed articles to various eSignal™ and Bloomberg® publications.