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LNG About to Start a New Upleg?


It has been about 5 weeks since I last wrestled with Cheniere Energy, Inc. (LNG) in the immediate aftermath of its second secondary this year, which forced me to average down and then trade out of it pretty much at break even.

The secondary triggered an exodus from LNG at 14.70 that pressed the stock down to a 12.19 low on July 25, which at the time, my work argued, represented the end of the large corrective decline off of the April 7 high at 18.92.

Now, with the benefit of an additional 5 weeks of chart action to factor into my analysis, my work suggests that all of the price action since the April high at 18.92 through today is part of, or the totality of, an extended digestion-correction process of the prior upleg from the October 2011 low at 3.17 (wow!) to the April 2012 high at 18.92.

If my perception of the pattern is reasonably accurate, then very soon we should expect LNG to thrust to the upside above key, near-term resistance between 14.80 and 15.25 to confirm the initiation of a new, powerful upleg that should propel prices to retest and hurdle the April high at 18.92, on the way to 22.00.

At this juncture, only a sharp decline that breaks 13.30-13.00 will invalidate my anticipation of the emergence of a new upleg much sooner than later.

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