It’s been hours since the Cheniere Energy Partners’ announcement of a FERC approval to export US natural gas for the first time and traders are already looking forward to trading LNG stock! Cheniere Energy received authorization from Federal Energy Regulatory Commission yesterday night to construct and operate facilities in Louisiana for the liquefaction and export of domestically produced natural gas according to the Natural Gas Act. LNG shares have surged from $2 to $17 during the last 3 years. Also notice the volume increase during the last 30 months! The stock is certainly in a strong uptrend that will get a huge boost due to this news. Can they beat the 2006 all-time high of $43? But more importantly, where may the rally find resistance?
Before buying LNG stock, it is beneficial to know price levels where resistance is expected. Looking at the weekly LNG stock chart, the stock had found resistance at the 161.8% Fibonacci extension this year at $17. This Fib extension level comes up when applying the technical analysis’ tool from the low at $4.50 to the high at $12 during 2011. Since we now know that LNG stock meets resistance at 161% Fibonacci extension level, we use the low of $8 and the high of $17 to plot the next 161% Fibonacci extension. Fib extensions are considered as hidden support or resistance levels, when no other apparent sup/res levels can be used.
A lot of stock trading action will take place on Cheniere Energy stock today. Better be prepared and use daily or weekly charts to find key price levels beforehand. During the trading battle, it’s easy to be carried away and overtrade.