Natural Gas Analysis for coming weeks

Edited on 04-Dec-2020 at 8:40 PM

Buying opportunities may emerge in Natural Gas in a few days.

After a steep fall on inventory date i.e. Thursday, 03-Dec-2020, Natural Gas may go in the consolidation of narrow range and likely to take support near 2.400.

Thursday on 03-Dec-2020, inventory came -1bcf while the expectation was -23bcf. Due to perhaps leaked bearish inventory report and technical correction, Natural Gas prices fall more than 10% in intraday trade. The steep fall in prices tried to catch up a little after inventory data but failed soon. The whole day was the Bear's dominant day and bulls got slaughter at every level. Prices also broke the major trend line and major support of 2.5.   

2.400 level is important for me because on 26-June-2020 Natural Gas made a bottom of approx. 1.400 from there it started upward journey of this year and made a high near 3.400 on 30-Oct-2020. Now 50% retrace of this journey will be 2.400 approx.

One point I would like to share that 200 EMA is also near 2.400.

In the below chart I also tried to show the two important indicators RSI and Bollinger Band. As per Bollinger Band, daily-candle is touching the lower band and indicating a reversal but RSI is currently near 37 at the time of writing this post. RSI is still above the oversold mark of 30 or below, so a small correction is still due which will be fulfilled when the price will dip towards the 2.400 level.

For the investor who is interested in making a position for at least 1-2 months, they can catch on to any dip from the current price which is currently trading near 2.5xx.

Long term trend is still in the upside direction and may try to reclaim above 3$.

Stop-Loss is an important part of trading/investing so one can place an SL below the 2.35 level.

Disclaimer: The author of this post does not have any position in Natural Gas futures. Readers are advised to take any position at their own risk; as Natural Gas is a highly volatile and most liquid commodity. Any loss/profit made on the basis of the above analysis will be unclaimed.