Natural gas futures (NYM.NG) closed above their upper Bollinger band the last two days as the market has reached new 52-week highs. The market has seen nine consecutive days where the four-day rate of change is positive (Nine Higher) bringing the market to a close of $10.733 per mmBtu on Monday. EventEdge indicates that $12 may be in sight; however, one should be cautious and trade small size as drawdowns up to 10% should be expected as a possibility.
Q: How has NYM.NG responded to closing above its upper Bollinger band back to back days coupled with a close above the 200-day average and a 50-day highest high?
A: According to the 33 previous occurrences of this event omitting any repeat occurrences within 10 trading days, EventEdge® indicates that NYM.NG has shown a weak bullish edge that peaks 19 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Monday, April 21, 2008) is Friday, May 16, 2008.
NYM.NG rallies in 82% of the cases (27 of 33) by an average of 17.9% relative to the close on the event date. The average of the six declines is 11.3%. The overall return of the 33 cases is 12.6%, which, based on the close of NYM.NG on the event date ($10.733), provides a target price of $12.085.
If you would like to see more details of this historical edge, go to www.markethistory.com
To see this in EventEdge® click here.
HYPERLINK "http://www.markethistory.com/staff/detail.html?s=mickey" Mickey Schoenhals is an analyst with Markethistory.com.
