After looking at the long term candles formed and reading about recent developments around gas, I think it is possible that a geopolitical battle between Europe, Russia and USA in the first half of the year that will bring the gas prices to very low levels. And candles are talking about this now.
On December 31st, natural gas printed very decisive candle formations that will help us to look into the future. This review is fully aligned with our forecasts in September 2021 and December 2021. If you followed @InvestingAngles and our NatGas forecast in September, you would know that #NatGas was entering a strong bear market three months ago. Based on the yesterday candles, the bear is not done, not even close.
This review covers:
– evaluation of long term candlesticks;
– Elliott Wave long term and short term projections.
This yearly review continues the series of long term Forecasts for 2022 that @InvestingAngles provides for the followers and subscribers.
The 6-month candle is a brutal Gravestone doji. This candle almost always resolves down and the price typically falls the length of the upper wick. After a quick measuring I should say that gas at $1.0 in the next 6 months would not be a surprise.
The quarterly candle formed bearish Engulfing by 1.4 pips, signaling that at least one month of lower prices is expected. The candle formed on a strong RSI breakout from the overbought territory with other indicators supporting a strong move down.
As anticipated, the monthly formed a Tower Top and Three Black Crows. These formations will define the bearish path for the next several months.
The weekly formation could resolve up or down, depending on the next candle. However, even the weekly starts a rally, it will be short-lived.
I’m not looking at the daily candles in this review – they are considered as noise in light of such powerful bearish formations on semi-annual, quarterly, and monthly frames.
The most interesting is the yearly candle that closed by 0.8 pips higher than the 2019 high, thus confirming the bullish reversal on the yearly frame. The yearly candle 2022 is expected green, closing higher than $3.73 in 2021.
Summary on Candles:
Natural Gas is expected to continue falling in the first 3-6 months of the year, possibly as low as $1.0. Once the bottom is hit, a rally is expected to close the year 2022 higher than $3.73. Potentially, the investors could triple or even quadruple their gas investments in 2022 if bought at the bottom.
This section discusses the long and short term charts. Let us see whether Elliott Waves support the message from the candles.
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