Is Natural Gas Forming A Double Bottom?
Simit Patel | Dec 10, 2014 12:44PM ET
Natural gas prices are rapidly approaching the swing-low that occurred on October 28, 2014. In technical-analysis parlance, that's known as a 'double bottom'.
Technically, though, it might not be an exact double bottom, as the current low the market appears to be making is a bit higher than the October 28 low. And that could be interpreted as a pattern of higher lows, which would also be bullish.
For reference, the following chart compares oil and natural gas. While oil has really sunk since sanctions against Russia were imposed at the end of July, natural gas has only dipped mildly. Some argue this is because oil is being intentionally pushed down as a political strategy of weakening countries that are deeply oil dependent (such as Russia, Iran and Nigeria). If that's true, presumably the disconnect could continue until we see signs of oil bottoming.
What do you think?
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