Price action suggests a winter pop is on the horizon. Target Profit: 8%
The time frame for this trade is about a month so I will be using the March contract ( NGH2021 )
Technicals This week Natural Gas initially sold off but traders eventually bid prices back up to form a bullish hammer which now sits just above a previous support level. In addition, the weekly RSI is near the lows and starting to curl up indicating a reversal is on the way.
Looking a bit closer at the daily chart, it is clear the downtrend is broken and the MACD is showing momentum is starting to shift.
Targets Now that the bullish technicals are confirmed I'll use Fibonacci retracements to find a good sell target, measuring from the top to recent low. Conventionally this should be somewhere between the 0.5 and 0.618 with 0.236 now acting as support. If prices close below this level then it's time to reassess. For now the target is about 2.9ish.
Trading is risky. Don't do it.
Long QGH2021 +1 @ 2.68
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This week prices rallied to the 0.382 fib retracement then dramatically pulled back, breaking below the 0.236 level. Overall this looks like a bottoming pattern so to confirm, I want to see a close above that 0.382 level in the next week or so.
Trade closed: stop reached
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Winter's a flop. Focusing now on next summer setup.
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Easy long setup here. Placing a buy stop order at 2.512, just above the last few candles on the 1 hr chart. There is a bullish divergence on the RSI and MACD with a flat line of price action. If my order fills the sell target would be somewhere near the gap above.
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I forgot QG mini contracts only allow increments of 005 so it's actually @ 2.515
Trade active
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Prices dipped further this morning while the MACD remains poised near a breakout above zero. It's been selling off the past 10 days straight so the odds of a relief rally are growing. I went ahead and opened a long @ 2.465 on this dip.
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Weather is already priced very bearish so I'm holding over the weekend. Don't see too much downside risk... at the moment. I'll be quick to take profits if we get a pop and will then look to switch short on the spring contracts for a target down to that 2.15ish level. ( Still long on August too )
Trade closed manually
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Quick to take profits here as weakness shows after touching resistance.
i dont know man even from teh first charting it looked like it was already in a downtrend, i didn't like the rsi, i didn't like the lower highs except the last one might have faked many traders in thinking it was a sign of reversal there when ng hit 2.8x but if u think about it, it only wick, and it always closed on the body at or below resistance of 2.7x. in any case going foward, 2.38 seem like a target for a bounce i was thinking inverse head and shoulder on the daily but maybe the ugly looking head and shoulder on the longer time frame may play out for ng to hit 2.25 to 2.0 before rising again. the rsi looks like its getting pretty close to oversold though so maybe a bounce at 2.38?
trade-God
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@namv2008, My new short term target is 2.6-2.7 but afterwards I'd expect a deeper sell off. Apparently, weather flipped bullish over the weekend - possible gap up. If that's the case we'll have to see if it sticks. I don't give too much credit to H&S patterns because you can find contradicting versions easily. For example, on my other NG post I note the inverse H&S.
namv2008
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@trade-God, couple things I’ve seen let me know what you think:
1. descending wedge on the 4 hour and daily that is descending right into the 2.38 support. (Potential bullish maybe fuel by cold weather pops?)
2. Head and shoulder on the overall long term. It’s not text book shape but it is there .
3. An inverse head and shoulder forming on the daily and lower this combine with falling wedge would be pretty strong indicator for a bullish movement?
4. RSI, not oversold yet, I’m bias though, and it’s because natural historically always hit a strong oversold condition prior to a sustain rise and breaking resistance. The rsi is low but not low enough, don’t think will break 2.0 and rare to see back to back year for below 2.0. I think that be the low end. Will have to assess week by week( rsi oversold on the weekly be a buy for me)
trade-God
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@namv2008, Makes sense technically but what stands out to me more is fundamentals are much tighter and likely to remain so this year. Larger speculators are forward looking and see this which makes me think they are likely accumulating dips on summer/fall/winter contracts. Unless weather is abnormally bearish, downside I think downside limited at least on the contracts further out.
FocusWithin
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Feel like keep hitting those likes multiple times 🙏🏽