NATURAL GAS

Since the second quarter of 2020, I’ve been bullish on Natural Gas and Natural Gas stocks as technical evidence
dictated that was the appropriate posture. I opined that a secular bull market has commenced. Thus far, Natural
Gas has performed to expectations. Last week, it gained 16.28% to close at the highest level since October, 2008.
Having completed a base of 13-years, Natural Gas will head to record highs. Its previous record high was $15.78
recorded in December, 2005 (see January 17 report, “Resource Stocks – Technical Structure Is Bullish”, February 2
report, Commodity & Commodity-Related", March 1 report, Resource Stocks, Part 1 – 3, and March 13 report,
“Natural Gas”).
In a bull market, stocks that will provide the best returns are the highly volatile ones with a long base (four or
more years) as the longer the base, the more durable is the subsequent bull market and the bigger the upside
potential. Short-term, many of these stocks are overbought. When oversold, however, aggressive accumulation is
advised. Use the LTTS to help you in timing your purchases

LEON TUEY
April 18, 2022
 NATURAL GAS – YEARLY CHART

Chart 1
Last week, NATGAS broke out of a 13-year base and closed at the highest level since October, 2008. The
breakout is not surprising. The triple one-year bottom reversals, the long-term buy signal in 2019, and the bear
market’s “down-sloping wedge” pattern foretold of the breakout. Clearly, a secular bull market has commenced.
Record highs lie ahead.
 NATURAL GAS – QUARTERLY CHART

Chart 2
Last week, NATGAS broke out of a 13-year base. The breakout is not surprising. Note the long-term support
in the $1.50 - $1.70 area, the long-term buy signal in the second quarter of 2020, the one-quarter bottom reversal in
the third quarter of 2020, and the “fanning” downtrend lines. Also, in the third quarter of 2021, it broke out of a
large “down-sloping wedge” pattern which called for a move t $17.00 - $19.00 or higher.
 NATURAL GAS VS. S&P – QUARTERLY OSCILLATORS

Chart 3
Above chart shows the performance of Natural Gas versus the S&P. In the second quarter of 2020,
outperformance was signalled by the Leon Tuey Timing System (LTTS) as NATGAS was grossly oversold and
momentum improved. Not surprisingly, it has outperformed the S&P since. Until a grossly overbought condition
is reached and momentum deteriorates, further outperformance lies ahead.

NATURAL GAS – WEEKLY RELATIVE STRENGTH

Chart 4
 Since the week of December 20, NATGAS has outperformed the S&P and the VTI. Also, since the week of
February 7, it has outperformed the CRB Index. Moreover, as can be seen above, in the week of March 21,
NATGAS broke out of a small “triangle” consolidation pattern. A short-term target of $8.00 plus is readable.
Hence, last week’s upside breakout was not surprising.

NATURAL GAS STOCKS & ETFs

Except for USEG and the ETFs, other stocks were recommended previously. Despite their gains, further,
substantial gains lie ahead.
 BIRCHCLIFF ENERGY (BIR $9.98) – MONTHLY RS & MONEY-FLOW

Chart 5
BIR has traced out a long base going back to 2008 with resistance in the $13.50 - $14.00 area. Encouragingly,
its Relative Strength (see white chart at top) has broken a 13-year downtrend pointing to outperformance ahead.
Completion of this huge base will send BIR to heights that will surprise all.
Would continue to accumulate on weakness.
 CANADIAN NATURAL RESOURCES (CNQ $83.00) – QUARTERLY RS & MONEY-FLOW

Chart 6
CNQ was recommended several times over the past year as I was impressed by the long base and the persistent
accumulation. Last year, it broke out of a 13-year base signalling the commencement of a secular bull market.
While short-term overbought, the secular bull market is far from over. Hence, when oversold, buy or add to
holding.
 CREW ENERGY (CR $5,50) - MONTHLY RS & MONEY-FLOW

Chart 7
That the bear market is over and a secular bull market has commenced is without a doubt. The 5-wave bear
market, the long-term buy in March, 2020, and the subsequent long-term downtrend breakout all speak bullishly for
CR. CR also appears to be tracing out a huge base going back to 2006 with resistance in the mid-20s. Completion
of this huge base be a whole new ball game for CR. Impressively, since 2020, CR has outperformed the S&P and
the VTI. Accumulate when short-term oversold. FAIR DISCLOSURE: I am long CR.
 KEYERA CORP. (KEY $33.73 CAN) - MONTHLY RS & MONEY-FLOW

Chart 8
KEY has broken out of a 7-year base signalling the beginning of a secular bull market. The breakout is not
surprising as stock has been strong, consistent accumulation. Accumulate on weakness as the bull market is still
young.
 SOUTHWESTERN ENERGY (SWN $8.19) - MONTHLY RS & MONEY-FLOW

Chart 9
Indications strongly suggest that the bear market is over and a secular bull market has commenced. As noted
recently, SWN has broken out of a “head-and-shoulders" bottom. An intermediate target of $11.00 - $13.00 plus
can be projected, but much higher long-term. Stock was previously recommended.
 SOUTHWESTERN ENERGY (SWN $8.19) - WEEKLY RS & MONEY-FLOW

Chart 10
SWN broke out of a 4-year “head-and-shoulders" bottom on heavy trading. Note the surge in the money-flow
indicators. Clearly, stock is under strong, persistent accumulation. When short-term oversold, accumulate or add
to holdings.
 U.S. ENERGY CORP. (USEG $4.79) - MONTHLY RS & MONEY-FLOW

Chart 11
USEG appears to be tracing outa 6-year base with resistance in the $18.00 - $20.00 area. Note the one-=month
bottom-reversal traced in August, 2019 and the one-quarter bottom-reversal in the third quarter of 2019. Also,
since the end of January, the OBV has been surging, a clear sign of accumulation. As the monthly Bollinger Bands
have narrowed significantly, penetration of the upper Bollinger Band will signal that the next probable direction is
“Up”. Those who can assume a high degree of risk may wish to initiate a position on weakness. Completion of the
6-year base will drive stock to $30.00 plus.
 NATURAL GAS ETFs
The problem with the ETFs for commodities is that they don’t track the underlying commodity closely.
UNG, for example, resembles nothing like the price of Natural Gas. If the commodity is in backwardation, the
commodity can rise, but due to the daily re-balancing, the ETF can go down. Because of time decay, they are not
suitable for long-term investments. They should only be considered by the very sophisticated traders who have
impeccable timing.
 UNITED STATES NATURAL GAS FUND (UNG $25.60) - QUARTERLY RS & MONEY-FLOW

Chart 12
The 5-wave bear market, the long-term buy signalled in the fourth quarter of 2020, and the long-term downtrend
breakout strongly suggest that an important low has been reached. As the quarterly Bollinger Bands have
narrowed, penetration of the upper Bollinger Band suggests that the next probable direction is “Up”.
HORIZONS CANADIAN MIDSTREAM OIL & GAS INDEX ETF (HOG.TO $9.76 CAN) -
MONTHLY RS & MONEY-FLOW
 Chart 13
In June, 2021, HOG broke out of a 7-year base. Also, as can be seen in the money-flow indicators, HOG has
been under strong, persistent accumulation. Short-term correction notwithstanding, further, substantial gains lie
ahead as a secular uptrend has commenced.
 HORIZONS NTAURAL GAS ETF (HUN.TO $20.17) - QUARTERLY RS & MONEY-FLOW

Chart 14
The five-wave bear market, the long-term buy in 2017, the clear signs of accumulation, the “fanning” downtrend
lines, and the upside breakout in the third quarter of 2021 all suggest that the bear market is over and a secular bull
market has commenced. Short-term, however, HUN is overbought and will likely consolidate.correct.
LEON TUEY
April 18, 2022