Natural gas futures rallied to 199 on MCX breaking the
upside resistance. This was majorly due to the weather across US.
This suggest that it might become a buyers’ market for a
while and if the EIA storage build is less than forecast than we can expect a rally till 205.
We saw strength last week due to weather concerns and this
is expected to continue this week. Looking at weather forecast for this week
and next we could see an increase in demand of NG.
Trades have been ignoring
the EIA storage deficit, thinking that it could be factored later in October.
Tables have turned now and it is expected that there could be increase in
demand of the NG based on the current weather forecast.
Looking at fundamental and charts, it is expected that if NG
breaks above 200 than we can expect and immediate rally till 205 and if not
than we can expect seller to jump in and create short positions.
Natural gas production - Generatebucks.com |
Looking at investors’ reaction today in the market, we can
expect NG to continue upside momentum in coming sessions. We could see strength
this week but this will all give a chance for hedgers to look at short
positions at encouraging prices.
Intraday – Buy NG at 199 with target of 201-202 and SL of 197.
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