[Chart Of The Week] Natural Gas Stocks Break Out Of Major Consolidation!

JC Parets
January 8, 2018

It's a new year and we're already starting to see brand new trends emerging. One area that I've preferred to stay away from for a long time has been the energy and natural resource space, which just so happen to be 2 of my favorite areas to be long heading into 2018. Today I want to point out the major reversal in Natural Gas stocks that I believe will catch many by surprise as we progress into the first quarter and likely beyond.

Here is the Natural Gas Index Fund which is made up of some of the largest natural gas stocks:

What I see is a 2-year consolidation in price within two converging trendlines that is typically continuation in nature. In this case, we are talking about a long-term downtrend, or course, so the resolution should have been to the downside. But it wasn't! When continuation patterns resolve in a reversal that is the signal. It reminds me a lot of Silver in early 2016 right before the epic squeeze higher.

I think based on the weight-of-the-evidence, including both Canada and Australian Stock markets breaking out to new highs and the recent relative strength in Energy as a group, we want to be long Natural Gas stocks heading into the first quarter of 2018.

Premium Members click here for a list of Natural Gas stocks we want to buy.

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Cheers,

JC

 

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