Natural Gas Stock Ignites Breakout, Fuels AI With Middle East In Turmoil

The U.S.-Iran conflict has severely disrupted the energy industry, particularly in the Strait of Hormuz, the channel for approximately 20% of the world’s liquefied natural gas. A key player in that space with a focus on microscale LNG and compressed natural gas technologies, CNX Resources (CNX) remains in buy range amid the hostilities.

On Feb. 27 — just a day before U.S. and Israeli forces attacked Iran — CNX stock jumped past a 41.25 buy point in a cup with handle. Despite the market volatility that ensued, shares rose for seven straight sessions before retreating on Friday. Given the uncertainty around what happens next, IBD just reduced its recommended market exposure level, a reminder that investors should heed the principles of risk management, including how to buy stocks and when to sell.

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Fueling A Clean AI Revolution With Natural Gas

Tracing its roots back to the Consolidation Coal Company founded in 1860, CNX Resources has transformed itself into a pure-play natural gas firm. Based in Canonsburg, Pa., the company provides ultralow carbon natural gas from the Marcellus and Utica shales in the Appalachian region.

The surge in demand for energy-hungry artificial intelligence data centers has also driven demand for CNX stock. Aiming to establish itself as the power plant for the AI revolution, the natural gas leader has adopted a “mine-to-megawatt” strategy. That includes initiatives to power on-site AI data centers using CNX’s Remediated Mine Gas and waste methane.

On Jan. 29, the company reported fourth-quarter sales growth of 347% to $610.5 million. Wall Street forecasts triple-digit revenue gains for each of the next two quarters as well.

In terms of bottom-line numbers, earnings rose 18% to 67 cents per share in the fourth quarter. In 2026, analysts expect just a 4% rise in earnings to $2.61 a share, but see a 54% spike to $4.01 a share in 2027.

With Wall Street perhaps looking ahead to what might be on the horizon, CNX has flashed clear signs of demand. The stock currently sports a 1.6 up/down volume ratio and an Accumulation/Distribution Rating of A.

CNX Stock Shows Tight, Healthy Trading On Breakout Move

After hitting a new high in November of 2024, shares of CNX fell into a slump, in which the stock formed a long, 53-week cup pattern.

Once CNX stock found its footing, it began to form its latest cup with handle. That new base showed tighter, healthier trading than the prior pattern. Other positive technical indicators include how the 21-day exponential moving average rose above the 50-day line, and the relative strength line stands now right around a 52-week high.

Since clearing the 41.25 buy point on Feb. 27, CNX has held within the 41.25 to 43.31 ideal buy range. It closed the week in buy range, but the ran out of gas on Friday, taking a 2.6% loss. That volatility offers another reason for investors to proceed with caution.

Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.

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