Careful chasing Natural Gas parabola’s

When prices go parabolic and reach extreme levels…..why should we expect a different outcome in Natural Gas prices this time?

The chart below shows you moments when the Henry Hub Natural Gas price has traded at 2.5 standard deviations above its weekly and registered a weekly Overbought reading on its RSI.

Furthermore, I’ve thrown in the percentages Natural Gas had traded above its 200 week moving average.

This tells me that one shouldn’t be chasing a long position in this rarified air.

While it’s a sellers market, not a buyers one….it doesn’t mean, I’m going to ‘short’ it either….

Today, Natural Gas is trading at $9.33.

I’ll look for it to top out around $10.60 or so.

I’ll look for notably lower prices before considering a ‘new long’ position.

August 24, 2022

by Rob Zdravevski

rob@karriasset.com.au