Posted on March 13th, 2008 at 12:42 PM

     Back in January, we were looking at March Natural Gas as possibly setting up for a large 1-2-3 pattern to the top side. (see: Natural Gas Outlook)  That scenario obviously played itself out fairly well throughout the rest of the March contract.

     Now that we are rolled over into April's contract, we will continue our outlook. The Wave 3 that has come in has pushed up with a vengeance. It kicked off strong once it breached the previous price level of our Wave 1 from Jan 14th. Notice how the market gapped right through the price level once it decided to move beyond Wave 1.

     Now that Wave 3 is in high gear, it's time to start looking at potential road blocks up ahead. We moved smoothly past the historic 1.618 extension of Wave 1 with no hazards. That was back at 9611 last week. Now we look ahead to the construction of our 2X1 angle coming down in our long-term Gann Box. Today's push seems to have moved us beyond the upward 1X4, so it's this 2X1 that we have to look to for next week. It is sitting at roughly 10500. If we successfully avoid that oncoming traffic, the historic 2.618 extension of Wave 1 is up ahead, and has company. It is very close to the 50% level of our long-term Gann Box. 2.618 is at 10890 in price, just a few ticks above the 50% level.

     Time will tell which scenario will play out from here. All we can do at this point is prepare ourselves for the "what if". If you are still long NG from our previous discussion in January, kudos to you. Now you have some key numbers to look for areas to take your profits.

~Nate McCartney

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