Viking83
Short

Natural gas intermediate top

OANDA:NATGASUSD   Natural Gas
224 7 2
5 months ago
Natural gas             has during its last intermediate cycle broken out of its down-trend zone. This cycle has now lasted for 57 days. Based on the first intermediate cycle top/bottom it hit the 2.618 FIB ratio on Friday.
RSI is in the overbought zone showing divergence with price.
Momentum is approaching "the red zone" typical close to the cycle tops. I expect either a sharp drop on Monday or a re-test of the Friday level before the drop. I expect the first drop to at least go down and test the trend-channel wall at the 78.6 FIB level.
The price is stretched far above the 200 MA.
5 months ago
Comment: Due to that his has been a recent break-out from significant levels, a higher level might be tested before the turnaround. Therefore, watch price-action carefully in the coming days before entering position. It might go up a bit more due to this breakout. A double top signs reversal.
5 months ago
Comment: It hit an important resistance zone, adding first tranche of DGAZ.
5 months ago
Comment: Looks like price struggles to manage a higher high of today, it have tried 3 times. So far so good.
5 months ago
Comment: Point of entry for second tranche:
5 months ago
Comment:
Point of entry for second short tranche
5 months ago
Comment: The idea with adding tranches; just like trying to time a bottom, it is sometimes difficult to time a top. But the higher a price goes, the less probability is that it will keep increasing as price over time has a tendency to regress towards the mean.
I start normally with a small position (20-25 % of total planned amount), then add at each higher resistance zone depending how significant the resistance zone is. The next resistance zone is very significant given the cycle structure of our current run. There I will add a bigger position (40 %). I placed 25 % of the position at the blue resistance top line. If it reaches the above zone, I will be 65 % invested in the position.

No question that there is a lot of upside potential in NatGas over time, but its current cycle is very mature and price stretched and overbought. It has only been more overbought 5 times the last 4 years.
5 months ago
Comment:
Watching price action at this point


Watching price action at this point.
5 months ago
Comment: It touched and retraced. Do not add more positions just yet. Wait for either the next top or that it crosses that line.
5 months ago
Comment: Adding 25 % to the short position. It broke the resistance line on the 2nd try
FrancisNeslo
5 months ago
Are you still confident it will go down? What's your first target?
Reply
Viking83 PRO FrancisNeslo
5 months ago
Confident I am, but financial markets are no certainty! My first target is the neutral zone at about 3. If price fall through that area easy, it will be a guidance if the cycle is over and I will add to the position.
Reply
Viking83 PRO FrancisNeslo
5 months ago
1st target
Reply
FrancisNeslo Viking83
5 months ago
Well this stucks. Did you get stopped out?
Reply
Viking83 PRO FrancisNeslo
5 months ago
No, I added 25 % to the position yesterday.
Resistance cluster
I place the stops at 3.75.
Reply
Viking83 PRO Viking83
5 months ago
I initial target 2.4 area.
Reply
Viking83 PRO FrancisNeslo
5 months ago
Are you not satisfied with the trade? :)
Reply
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