1/ Dollar: Bullish or Bearish?
2/ $NATGAS Above the VWAP
3/ Breakout Setup!!
4/ Strong Relative Strength
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1/
Dollar: Bullish or Bearish?
The US dollar has remained in the area that has been acting as resistance since 2022. After 7 weeks of continuous advance, the week has been quite flat, with a price that does not give any sign of its next move.
The American currency has been oscillating sideways, since 2022, between 99 and 106. The upper zone of this range (resistance), which coincides with the 50 level of the Fibonacci retracement marked since its most recent high, is containing the price. The price has already accumulated 3 clear bounces in each attempt to overcome this level.
Courtesy of StockCharts.com
The question is, will it be different this time? There are several factors that will undoubtedly impact the near future.
The impact of a second Trump term on the USD will depend on the interplay between his policies and global dynamics. In the short term, the USD could benefit from his protectionist and expansionary stance. However, in the longer term, fiscal pressures and international perceptions of the US could weigh on the dollar, especially if other countries diversify their reserves and promote alternatives to the USD-dominated system.
2/
$NATGAS Above the VWAP
During the winter (October-March), demand for natural gas tends to increase significantly due to its use as a heating source in the northern hemisphere.
Possible scenarios in the short term for Natural Gas are:
- Higher prices if the winter is colder than anticipated.
- Downward pressure if inventories remain high and demand does not reach expected levels.
Courtesy of StockCharts.com
The price has remained bullish since the beginning of February and has already managed to cross above the VWAP drawn from its 52-week high, which had been acting as resistance to the price since August 2022.
Both the MACD line and its histogram have given a positive reading, signaling a possible change in the trend of natural gas towards a bullish direction. The upward momentum is gaining strength.
3/
Breakout Setup!!
EQT Corporation, the leading U.S. natural gas producer, is strategically positioned to take advantage of future natural gas demand. However, analysts maintain a mixed approach, with a majority leaning toward “hold” recommendations as the outlook for natural gas prices remains subdued in the near term.
EQT’s correlation to natural gas prices remains a critical factor. If gas prices hold or rise, EQT is likely to continue higher.
Courtesy of StockCharts.com
After forming a huge base, between 2017 and 2022, the price has stopped its ascent, started in 2020, and has consolidated within a range. The share price is leaving us with a bullish setup, which will be confirmed if we finally have a breakout above resistance levels. At the moment, the price is starting to visit the resistance of the range, after an almost +28% increase that was marked just before the end of November.
EQT presents itself as an interesting opportunity for investors with a medium to long term perspective, especially those who believe in an eventual natural gas rally.
4/
Strong Relative Strength
Baker Hughes Company (BKR) is an energy technology company with a portfolio of technologies and services that span the energy and industrial value chain.
The price remains above the resistance (2011) recently overcome, while its relative strength ratios against its industry, sector and the market remain positively sloped. A clear sign of strength.
Courtesy of StockCharts.com
Baker Hughes is now on track to end 2024 up more than 25%, which would mark its fourth straight winning year.
Following this run, the average analyst surveyed by LSEG sees the stock gaining slightly under 3% over the next year. Most analysts have buy ratings on the stock.
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Originally posted 21st November 2024
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