We saw an increase in the NG prices last week due to weather
concerns and storage deficit expectations. While prices were gaining momentum,
we saw a sideways trade with less movement last Friday after release of EIA
report.
On Thursday, the U.S. EIA reported that domestic supplies of
natural-gas stockpiles rose by 46 billion cubic feet.
Looking at the weekly trade and strength in dollar index, we
can see prices gaining momentum on MCX.
Overall trend for NG is sideways since
investors struggle between supply and demand. Currently, both supply and demand
have been met, so we might not see upside trend for a long time.
Looking at the weak rupee prices and less movement we see
prices hovering around same level moving 2 points up and down.
These markets are quite challenging from an Intraday
standpoint or a positional trade. I would suggest investors to enter only if
they are looking for a medium-term trade.
It is important to note that weather might not make much
difference currently since production has increased and meeting the demand.
Also, one aspect to note is that most investors are not relying
on the market as global markets have been quite volatile.
For trade for this week, an investor could enter creating
short positions on high. Short NG on 206 with target of 201-199 by end of this
week or early next week and SL of 208.
Please keep in mind that prices in the
global market are hovering around $3 - $3.10 but upside on MCX is due to
falling Rupee.
For more info about prices last week, please refer to
Natural Gas Markets.
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