Sniffing around for the low in natural gas may seem like stinky bottom picking, but can perceive the perfume of profits nearby for savvy traders

Natural gas continued its thrust down out of the recent triangle consolidation, with UNG touching an intraday low at $12.31. This isn't quite enough to meet one of my two measured-move targets for completion of a fifth-wave thrust - those targets are $12.00 exactly, and if lower then approximately $10.50 to $11.00. (The lower targets are just in case the triangle wave "E" would measure from approximately $14.80 rather than from $16.26.) I checked the hourly intraday chart and there isn't enough to call a trend reversal yet - not in terms of price pattern, or in terms of the indicators.

There's just enough positive divergence to give some hope to swing traders who want to find the bottom and go long - but, don't buy yet. Volume has picked up but not to the point of capitulation. My weekly chart of $NATGAS (below) confirms the violation of support, and my monthly chart of it (at bottom) shows there's a lower trendline which, I have a feeling, is likely to be touched by the time the thrust down completes. I said before that it would not take long for natural gas to find its low, because a fifth-wave thrust from a triangle doesn't fool around - it just moves right to its target.

So, my best take is, let it prove itself, let it show whether it indeed wants to get right down to $12 or possibly below. If you are looking intraday then keep an eye on the hourly bars to look for three things - an initiating pattern of higher highs with higher lows, on good buying volumes, with the indicators sparking positive. Swing traders on the daily bars will look for the same things, just with the daily bars.

Once it does find bottom and start up, then of course one initial target will be that 50-day moving average. So - don't wade it too early ... but the odds are that it won't be too much longer, maybe just another day or so.

Caution - if it doesn't find support with UNG at $12 - and if lower, $10.50 (although I do rather believe $12 in UNG should do it) - then don't be afraid to cut it loose. Because if it violates the very long-term support trendline, then we'll have to re-check the analysis and see just how low can it go. So again - when it looks like it's putting in a trend reversal pattern, by all means buy long, but do place a stop just beneath (slightly underneath) the low of the lowest price (e.g., if it bottoms at $12.00 then a stop at $11.74, perhaps) and honor that stop if it plunges lower.