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The bitter cold weather has caused a spike in the Natural Gas prices. Also a large fall in inventories supported the positive price action for Natural Gas.

 

Vicky, you ask will it retreat. No one knows the answer for sure. Based on odds and balance of probabilities and using current and historical information Natural Gas active futures yesterday were 10.6%, 6.8%, 6.4%, and 4.2% above their 20-day, 50-day, 100-day, and 200-day moving averages, respectively. However, the 50-day moving average was 2.7% less than the 200-day moving average. That could be bearish for natural gas prices so it could well retreat. 

 

For me 3260 level has to be crossed for any chance of Natural Gas not retreating. However this is only my opinion. Let's see.

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Hi All, 

 

I'm a commodities trader and have recently entered the realm of NatGas.

 

I can honestly say, this is one of the most interesting markets that I've traded for years, and can highly endorse the fact that this follows core fundamental economics and the derivative markets do little to slow down the fundamental direction.

 

It's one of the few markets available now that doesn't follow these silly algorithmic price-action rules, it's a simple case of supply and demand, now and forecast - a simple forecast matrix with a seasonal twist.

 

My personal forecast for NatGas is Short (based on 6 months of research, price watching, and analysis of how this commodity has reacted over the past 12 years)...

1 week - 2.9 to 3 USD

1 month - 2.7 - 2.9 USD

1 quarter - 2.5 USD

1/2 year (summer) - 2.4

 

Happy to elaborate my reason but it would definitely take up a LOT of space on this forum, and would be better off writing a blog article in the near future combining all of my research and rationale.

 

I'll be posting on here regularly with mini summaries as and when i enter trades at certain levels.

 

I'm also an active EUR/USD and Gold trader, so you'll find me on those forums too :)

 

D

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Heading towards 3260. The dynamics for Natural Gas are fascinating. I used to trade Natural Gas well over 10 years ago. It was an extremely volatile commodity back then. Mind you it still is!

 

You have the US buying Natural Gas from Russia. Prices for Alberta Natural Gas has increased by around 72%. There are pipeline issues in Canada. 

 

The EIA storage report shows natural gas in underground storage to be near 5-year lows, which is a bullish factor.

 

The are potential weather risks with predictions of arctic blasts in February to come.

 

There could also be short covering occurring. 

 

Natural Gas is getting very interesting.

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Trying to kick up off it's base of around 2550 that has been support since mid 2016 and seems to be making headway after a slow start. Needs to secure 2800 (resistance of prior high mid March) and keep the channel going.

 

 

 

 

Natural Gas_20180501_14.10.pngNatural Gas_20180501_14.12.pngNatural Gas_20180501_14.16.png

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The smart trade would have or could still be (may not be too late)...

Long Natural Gas and Short either Brent or US Crude Oil

If it was not for Cryptocurrencies then I would have traded the above. I think I have learnt a valuable lesson and that is that I should have traded this over Cryptocurrencies (not because I do not believe in Cryptocurrencies) but the profit making potential opportunity on this trade was far greater than on any of the Cryptocurrencies that are available to trade on IG's platform during the same time period.

A very harsh lesson learnt by me on this occasion. Trade the strongest trends. I trade both Commodities and Cryptocurrencies and where as I managed to trade Orange Juice and Lumber which were exceptional trades and trends I have got distracted by the Crypto space which has meant my capital allocation has not been effective or as efficient as it could have been. 

I have made a grave error not trading the above in bold and we all have limited capital to trade so capital allocation is very important. 

The one thing I would say is that there could be a monster opportunity to go Short Natural Gas as there will be a lot of speculative capital in Natural Gas right now. There could also be a nice opportunity to go long on Oil should a trend reversal present itself. I may have to liquidate some profits from my long term share portfolio to enter such a trade should it materialise. I will stress that I am not suggesting going short on Natural Gas right now. The only trade right now is long as it makes new higher highs. 

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Has the time come to go short Natural Gas for a short term profitable trade?

793409477_NaturalGas_20181119_20_21.thumb.png.71a80d3df5db71f17abc55fa7b7e7b8c.png

The correction did not lead to it making a new high which is the first point I would like to make. On top of this the move upwards in Natural Gas was supported by speculators and trend followers in my opinion. Obviously the fundamentals support this move and there is a demand/supply narrative. 

From my experience in Natural Gas (historically) this could lead to a very profitable shorting opportunity if executed correctly. Patience is required to find the right time to open such a short and it may not be just yet.

My concern at this stage is that this recent price action is to entice 'shorts' and then the rally upwards continues leaving large losses for those who shorted too early. Upward trends last a lot longer than downward trends. This is an interesting one that I am monitoring. 

This is where fundamentals come into the fore. Any supply shortages or increase in demand due to the extreme cold weather predicted could prompt Nat Gas to shoot upwards so shorting it right now is very risky but make no mistake a fantastic shorting opportunity in Natural Gas is coming. 

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Natural Gas has crept further down and is around 7% down at the time of writing and since my last post around 9 hours ago. 

733126222_NaturalGas_20181120_05_37.thumb.png.0a0d7d225eaf4121f20c2c4e12e4b776.png

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