Energy Update

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NATGAS appears to have left behind a daily cycle low.

natgas

NATGAS printed its lowest point on Wednesday following the day 10 peak. Wednesday was day 17 for its daily cycle, which places NATGAS on the early end of its timing band for a daily cycle low. NATGAS formed a swing low, gaining a big 4.86% on the day. A break of the declining trend line will signal a new daily cycle.

You will notice that NATGAS closed above the upper daily cycle band as it rallied into its day 10 peak. During the decline, NATGAS managed to hold above the lower daily cycle band. Now a close back above the upper daily cycle band signals that NATGAS has re-established its daily uptrend.

Oil also had some bullish developments on Thursday.

oil

Since 21 days is too early to expect a daily cycle low to form, I expected oil to be rejected by either the 10 day MA or the declining trend line and then complete its daily cycle decline. Setting aside the early 21 day cycle count, oil is behaving as if it is rallying out of a daily cycle low.

The daily oil cycle peaked on day 12 and then printed its lowest point last week on day 21. Oil has since formed a daily swing low and regained the 50 day MA. Then, not only did oil regain the 10 day MA on Thursday, it also broke above the declining trend line and managed to close above the upper daily cycle band. The close back above the upper daily cycle band indicates that this is a new daily cycle.

oil fib

I still have some concerns that day 21 is too early for the daily cycle low. However, looking at the fib retracement we can see that oil retraced a full 61.8% on this recent decline. So unless oil does something to make me think differently, like closing back below the upper daily cycle band, I will label day 21 as an early daily cycle low.

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2 thoughts on “Energy Update

    • John,

      It sure looks that way. However, Oil did remain above the 10 day MA, so there is some wiggle room for oil to remain bullish.

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