Posts Tagged ‘MOM Indicator’
The US Natural Gas Fund
The United States Natural Gas Fund (symbol UNG) is now in the process of testing the $7.7 price line that is acting as a resistance. The momentum indicator (MOM) is giving a positive value and that is a good sign; and the RSI is going into buying territory as well. There is a rectangular pattern, as seen in the Closing Line Chart below, that is emerging and is smaller at the right end of the scale and may break upwards, which is the likely way as market indicators show a chance for it to break upwards. The fact that the pattern is diminishing and is not on an upwards ascent and, in contrast the RSI and MOM indicators are showing an upwards trend starting means that there is here what we call a divergence between the indicators and the price line. This shows decision in favor of the upwards trend. This may come soon or later on, but this equity most probably will continue in this pattern for a while.
The indicators show us the way to a good opportunity, though not for certain. There is a high demand for Natural Gas in the US and prices are, fundamentally speaking, supposed to be going up. They may be, if this analysis proves correct and the pattern breaks in the right direction.
Below you see the Japanese Candlestick Chart showing the support/resistance line and the divergence in blue, the indicators going up and the prices down., and the Closing Line Chart showing the rectangular pattern. I picked the Line Chart because is many times makes clear ambiguous signals from the Candlestick Charts as to the placement of Line Studies.
This is the way the divergence looks on the Candle Chart:
This is the way the pattern looks on the Line Charts:
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XLF, the financial-select SPDR
This seems to be in a good buy position. Especially since the Financial equities seem to be in a good mode for now and the worst (and not so worst) seems to be behind them. Now seems the time, according to Technical Analysis, to invest in the sector that caused us this depression and seems to be continuously a catalyst for recovery from it. Check out the Chart below, it speaks for itself.
This is the way the Chart looks:
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London’s a good place to be nowadays
The British Empire may rise again. The London Stock Exchange is the best-placed exchange in the world. It has not suffered from the corrections that plagued the rest of the world recently. Therefore it is not a surprise that WPP London is doing so well lately. RSI is in buying territory and MOM above 0 which are bullish signs. The Moving Averages 5, 13, 21 are in line for an upwards pattern. The line itself resembles a Gann Line with close to a 45 degree incline price/time. All this is on the weekly chart, for true traders (emotionless and cool) and people that can wait to see their profits come.
This is the way the Chart looks:
