Bottom pickers should sniff natural gas again for these breakout (or breakdown) targets

An old trader once said that "picking bottoms is a stinky business". Peeeuw isn't it true, LOL!!! "But" it can be very rewarding :)) Seriously folks, many traders spent months last year looking for a tradable bottom in natural gas ($NATGAS or an ETF like $UNG). We helped spot that it would take longer and lower, and also helped identify "the low". Since then, it's traded not only in its usually choppy daily fashion, "but" also in spikey weekly moves - with higher highs and higher lows. Did last week's carnage in commodities reveal a new opportunity in natural gas? You betcha! Let's look at the charts, below.

I've included my daily charts for $NATGAS and for $UNG (natural gas ETF) below. Those are followed by Tony Caldaro's weekly chart of $NATGAS from his public charts accessible at his the ELLIOTT WAVE Lives On website (always in the sites list, plus site feed, at right side of the page here - thanks again Tony!); plus my monthly chart of $NATGAS with my trendline markings and big-picture Fibonacci levels. The daily charts show that both $NATGAS and $UNG dropped neatly to moving average support. Tony's weekly chart indicates that $NATGAS should be making a swing low that's preparatory to another significant wave upward. And my monthly $NATGAS shows that price has been coiling up within trendlines in a rather triangular fashion. What happens after price retests a triangular pivot, as price is doing right now? It typically moves away from that pivot strongly. When it's ready to also leave the confines of the trading range defined by that coiling up or triangle, then price is also ready to thrust toward a new high (or low).

What'll it be for natural gas? The point-and-figure (P&F) chart at the bottom projects a bearish target of $1.50. Ouch! That actually would be a "triangle target" meaning the measured move if a thrust downward from the triangular shape it's been tracing. So if it breaks below $2.74 that would be a warning .... And below $2.48, it would be virtually certain to drop to $1.50/1.60. But the P&F isn't absolute.

On the bullish side, the technicals are supportive, and natural gas has been honoring a very long-term trendline that would keep it pulsing higher. Breaking to the upside would suggest a measured move close to $7.07 which happens to be one Fibonacci target based on a 1.318 extension of the drop within the triangular range. A 1.618 extension would point to $7.68, although it's more likely we'd see a pullback after the $7.07 area. Fibonacci retracements back to "the peak" on the monthly are $6.83 as the .382 retracement, and $8.13 as the 50% retracement. These reinforce the bullish projection to the $7 area first, probably followed by a retest of support in the $5 range before going higher to the low $8's. Moving higher would also get the 50-day moving average above the 200-day moving average, which is a bullish "golden cross" that $NATGAS is already working on and $UNG (which does move differently but generally similarly) is coiling up to accomplish. Of course KI$$ investor/traders should use stops too, and exit longs if this pivot/support area is broken to the downside. But the situation looks ripe for the long side again. All in all, it's looking like time to play natural gas from the long side again, with near-term support right nearby at the moving averages already being tested on the daily chart. Assuming it holds this support, then bubbling up should attract more buying to break out quite bullishly.