Natural Gas - A Technical Correction After Inventory Report

Natural Gas - A Technical Correction Has Been Seen After Inventory Report on Thursday 31-Oct-2019. Natural Gas Inventory Reported by EIA Came Above The Expectation.

A technical correction was seen on the day of inventory on 31st October 2019 (Thursday). Weekly inventory report by US Energy Information Administration (EIA) reported Natural Gas Inventory 89B while the market expectation was 86B and the previous reading was 87B.

Natural Gas was facing resistance near its recent high of 2.70 and it was showing a sign of exhaustion from the last 2 days. On Thursday (31-Oct-2019) it made a high of 2.737 which is just a little above its recent high of 2.714 but the price does not hold the gain on a closing basis and profit-taking was seen. I think it is just a technical correction and NG is still under the bull trend. Buying on dips should be the strategy for higher prices in NG. Seasonal demand and chart pattern suggest that when this correction will over, natural gas will go again in its bullish trend. It is just a pullback that you can say a healthy correction for further bull-run.

In the below chart I have used Elliot wave pattern to show this correction although I would like to say that it is just my view, not a trading recommendation. If anybody follows my analysis, they should understand that commodity trading is highly risky and they should trade with their own risk capital. 

NG-Daily Chart-Elliot Wave

In the above chart analysis, I tried to show the wave pattern from the August low of 2.0. As per my analysis, NG is forming the fifth wave of its major wave pattern. Within its 5th wave, which will be also a 5 wave pattern according to Elliot Wave theory. Wave shown in roman digits(i,ii,iii,iv) is under construction within major wave of (1,2,3,4,5). 2nd corrective wave (A)(B)(C) shown in red color is in progress and after completion, uptrend will resume. Important is here that how much this correction will happen and how many days, well that is tough to predict but I can say that this correction will complete in next 1-2 weeks.   

Disclaimer: The analysis and views given in this article are pure of my own and this is not a trading or investment advice. Do your own research and analysis or take professional advice before taking any position in the market. I will not be responsible for any loss in any manner.