Natural Gas Reversing at Major Flip Zone
Natural Gas has been in a downtrend with multiple swings, and we hit a major support/flip zone which you can see on the longer term chart.
We began to range on the 4 hour chart, which is a potential sign of a trend exhaustion. We then had a break of the 2.183 short term flip zone, and since then, we are now pulling back to retest resistance now turned support.
Awaiting to enter the trade. Two options:
1) Enter now with a better risk vs reward ratio, but a lower probability of success.
2) Or wait for the confirmed first higher low, which requires a higher high ( break and close above 2.234). Risk vs reward may be reduced, but the probability of success is much higher.
On the fundamental side, Natural Gas is of course cyclical...during the winter months people tend to heat their homes etc. There still is a large supply of Natural Gas out there, so not expecting any crazy increases in the long run, however, see a nice pattern here with many confluences including a fundamental of a more colder winter.
We began to range on the 4 hour chart, which is a potential sign of a trend exhaustion. We then had a break of the 2.183 short term flip zone, and since then, we are now pulling back to retest resistance now turned support.
Awaiting to enter the trade. Two options:
1) Enter now with a better risk vs reward ratio, but a lower probability of success.
2) Or wait for the confirmed first higher low, which requires a higher high ( break and close above 2.234). Risk vs reward may be reduced, but the probability of success is much higher.
On the fundamental side, Natural Gas is of course cyclical...during the winter months people tend to heat their homes etc. There still is a large supply of Natural Gas out there, so not expecting any crazy increases in the long run, however, see a nice pattern here with many confluences including a fundamental of a more colder winter.