The Story/Catalyst:
Crude oil prices has been falling so much. This will force many oil drillers to bankruptcy and/or drastically reduce drilling activities. Natural gas being a byproduct of fracking, will then experience a reduction in supply.
The Technicals:
As mentioned in my previous post, natural gas has been forming a support at the previous channel. It also has an RSI divergence, double bottom, and now is forming higher low and higher high.
Same is true with the natural gas ETF, UNG.
On the shorter time frame, it is easier to see that the completely formed double bottom is now forming a handle. This is a good place to start finding an entry once this handle starts making higher lows. Then, you can place a tight stop loss at the bottom of the handle. For a looser stop loss, you can place it below the double bottom.
I believe there is a perfect storm brewing for a major spike in natural gas prices!
Good Luck
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