Elliott Wave: Weakness Resumes On Natural Gas
Mar 15 2021
We noticed a downward movement starting on November 2nd which eventually developed in the shape of a diagonal. Now, for those who are not familiar with Elliott Wave, a diagonal is a motive wave structure which is composed of five sub-waves. It can occur in wave one of an impulse or A of a correction. What is the most important about diagonals is that subwaves 2 and 4 will overlap and that the pattern occurs at the start of a trend so after a three leg retracement that new trend is expected to resume just like in our case on natural gas, where leading diagonal suggested more weakness after a bounce back to 3.00 resistance.
On February 5th our analyst said: “
… despite the current recovery , watch out for limited rise and be aware of a downtrend resumption…”
February 5th chart:
Today we are seeing an initial move down which has broken the parallel channel formed by the corrective waves that followed the leading diagonal. As such, we expect further downside to come in the following days, but we need to keep in mind that since the diagonal could have been a wave A and not only wave one, then the price can be looking for limited weakness within leg C, but even this one is incomplete for now, so be aware of more downside.
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