How to trade Natural Gas This Week

 

Buying opportunities will emerge soon in Natural Gas.

Fresh buying may come in Natural Gas this weekend or next week.

The inventory report of Natural Gas is due on Friday, this week. We are not excited with the inventory report which should come near the expectation, but we are focused on the technical chart pattern which is suggesting a buying opportunity will emerge soon.

Short-term investors can enter in this opportunity with a good risk-reward ratio. Here the possibility of loss is less and the reward may be up to 10 times.

In the below chart I am focusing my attention on two indicators - RSI and Bollinger-Bond, as usual.

RSI is reaching near the oversold region and Bollinger-Band's lower band is ready to touch.

Price-action will be important to watch this weekend and after the inventory data release.

On MCX 175-170 is buying zone with SL below the 170 for targets up to 20 Rs. The closing price on MCX on Thursday (21st Jan 2021) was 182.20. So we should wait for more price fall in NG.

Remember, the Expiry of the January contract is near and we can expect price volatility. Our position should be in the Feburay month contract. Goodness is there is less difference in prices of both month's contracts.

Let's look at the daily chart of Natural Gas -

Nat-Gas Daily Chart with RSI and BB

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.