trade-God

Natural Gas --- ( 2 0 2 1 ) Swing Trade

Long
NYMEX:NG1!   Natural Gas Futures
Alas! I am free to post what I want thanks to the help of everyone's contribution thumbs.
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The Natural Gas setup for 2021 is not only fundamentally bullish , it's a technical trader's gassy dream.
Welcome to the G a s i n o.

Macro View
From a macro view we can see that prices are now at the bottom of a historically supportive range. The previous deviations that dipped below this range were due to the bearish sentiment as production was trending up. This is no longer the case. Sentiment has now flipped cautiously bullish as supply/demand balance is expected to remain tight.

Bullish Indicators
First, we can see the weekly MACD is decisively bullish and above the zero line. This confirms momentum is going to likely remain bullish longer term.
Secondly, looking at the Commitment of Traders ( COT ) report on the indicator below the MACD , we see that Asset Managers and Speculators are more interested in long positions than usual. Should be plenty more next year.
Thirdly, prices are maintaining above the 50 week EMA .

Not to mention the inverse head and shoulders that is under construction. You heard it here first.

The Trade Setup
Now, if we overlay two important contracts for Summer(orange) and Winter(blue), we can start extrapolating potential targets. Current prices for either one are at the bottom of the range. This is what large speculators are looking at. This is where I am going to start accumulating starting with Summer. In addition, I am also buying dips of EQT as producers will benefit from stronger prices over the next couple years.

Looking at the August 2021 contract, prices have broken out of the down trend.
Today, in anticipation of a large swing trade next year, I opened a starting long position on the mini contract (QGQ2021) @ $2.78
I welcome dips and estimate a sell target somewhere well north of $3.00
TBD


Trading is risky, don't do it.

Long EQT and
QGQ2021 +1 @ 2.78
Comment: Been taking profits on EQT, trimming over the last week for a roughly 40% gain. Down to 1/3 position size.
Comment: Trimmed EQT down to 1/4 position size today. Will accumulate more on dips to prepare for a rally in the latter half of the year.
Comment: As we approach Spring contracts and typically warmer temperatures, NG prices tends to weaken. However, that is the time to accumulate on dips as 2021 is set for a deficit for the first time in a while. As Summer approaches, prices should start flattening out, grinding higher, then exploding in typical NG fashion.
Comment: EQT (NG producer) is pulling back after a 40% rally. I'm looking to reload this position and am waiting for a deeper correction towards $15 or so. Later this year I wouldn't be surprised for it to tag $20, possibly more.

Comment:
Comment: EQT dipped hard today so I'm buying a little here. Accumulating bits and pieces on any dips like this moving forward. Should start to see buyers coming in as it approaches the trendline.
Comment: Nibbling more EQT here at $16.46

Comments

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