Will Natural Gas futures continue to fall? Here is my view
Table of contents:
§ 1 Chart analysis
§ 2 Fundamentals
§ 3 My plan to enter
§ 1 Chart analysis
Looking at the NG!1(LNG futures) price, it's quite easy spotting the giant downward channel that price has been moving within for a while now.
As you likely already know, if you are a conservative trader like I am you would look only to take shorts at this point at the top of the channel, but in this case, things might be a bit different...
§ 2 Fundamentals
Now although looking strictly at the chart you would of course look to take shorts on the top of the channel, however, as I have mentioned in my FLNG analysis, China and India are planning on going from Coal heating to Natural Gas heating.
With that said, as we are currently moving away from summer and I predict colder weather will hit these countries within the next month, we might see a change in direction of price in NG as demand rises. Historically we have seen up to a 100% price increase during the winter, as that is when we have the most demand for heating.
§ 3 My plan to enter
I will be looking to enter short if price rejects upper channel and creates a regular divergence with the RSI, and I will enter if the price closes below the 50 EMA.
I will be looking to enter long if price breaks trough the upper channel, and we are met with a hidden divergence.
Another possibility is price retracing partly downward after rejecting top channel but not reaching the bottom of the channel, in which case if we get a regular divergence close to a previous support I will be looking to go long again, or atleast exit my trade.
Hope you found this helpful and good luck with your trading, although, if you trade based on luck you are already screwed.
Have a good day everyone
§ 1 Chart analysis
§ 2 Fundamentals
§ 3 My plan to enter
§ 1 Chart analysis
Looking at the NG!1(LNG futures) price, it's quite easy spotting the giant downward channel that price has been moving within for a while now.
As you likely already know, if you are a conservative trader like I am you would look only to take shorts at this point at the top of the channel, but in this case, things might be a bit different...
§ 2 Fundamentals
Now although looking strictly at the chart you would of course look to take shorts on the top of the channel, however, as I have mentioned in my FLNG analysis, China and India are planning on going from Coal heating to Natural Gas heating.
With that said, as we are currently moving away from summer and I predict colder weather will hit these countries within the next month, we might see a change in direction of price in NG as demand rises. Historically we have seen up to a 100% price increase during the winter, as that is when we have the most demand for heating.
§ 3 My plan to enter
I will be looking to enter short if price rejects upper channel and creates a regular divergence with the RSI, and I will enter if the price closes below the 50 EMA.
I will be looking to enter long if price breaks trough the upper channel, and we are met with a hidden divergence.
Another possibility is price retracing partly downward after rejecting top channel but not reaching the bottom of the channel, in which case if we get a regular divergence close to a previous support I will be looking to go long again, or atleast exit my trade.
Hope you found this helpful and good luck with your trading, although, if you trade based on luck you are already screwed.
Have a good day everyone
Trade active:
Currently have some minor long positions after channel breakout and retest before another push, this will likely be a semi long-term position that I will likely hold for the next 2 months unless we get indications that price will reverse.
