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| Natural Gas futures |
Seems traders and speculators
have been loving Natural Gas and Crude Oil futures. Traders just can’t get
enough of these two counters thus we could encountered high volatility. There is still scope for more.
Day before yesterday we saw a Natural Gas markets shining in
green and gaining more than 15%. This was the highest gain in a decade and was
unexpected move. Most analyst including myself felt that this move was
speculative and was highly unexpected.
Natural Gas futures’ November contract closed at 348 on MCX
on Wednesday. Many investors were expecting Natural Gas futures to trade higher
in yesterday’s trading session but we saw a bloodbath. Natural Gas futures were seen trading below $4.0
in US and around 388 on MCX. Natural Gas counter closed at 295.
Wednesday gains were almost equal to Thursday losses.
The market finally showed signs of exhaustion and we can
expect this to continue. Many traders were betting on cold weather in US between Nov 16 - Nov 22. Inventories were seen dropping to an average of 5 years low. This
spiked the Natural gas prices.
The news spread like fire and speculators took
no chances. Most short positions were squeezed and short-term traders were seen
stepping out of the market.
Looking at individual commodities
Natural Gas Forecast
We saw a bloodbath in this counter on Thursday which was
needed. The market was far ahead of itself and prices had rose unexpectedly.
Analyst were expecting this move a few a days ago.
Observing the weather report from different sources, cold
weather is expected so I don’t see prices trading under 230 in upcoming sessions.
Looking at the EIA report which was higher than
expectations, Natural Gas prices should consolidate in a decent range and we
should see range bound trade for coming week.
I expect Natural Gas futures to trade sideways to lower this
week since most traders and speculators were seen booking profits. The EIA
report which came out yesterday would also play a role in the market. Traders
who earlier overlooked the report are willing to consider it.
Traders have discounted the weather reports and so movement
should be restricted. This market is not for positional short position and Positional traders can looking to short
after mid-December.
Intraday positions – Expect high volatility in this counter
for few weeks
Intraday traders should look at creating short positions at
299 for target of 285 and SL of 302. Please follow SL.
Positional traders should buy at any dips, I see Natural Gas
trading in range 255- 310 for upcoming sessions.
Expect a drop in prices by end of next week. Be caution and
follow strict SL.
Crude Oil Forecast
It seems like Crude Oil counter has been loving all the attention
for past 3 months.
It has been dancing up and down. Smart traders have been
making profits trading Crude. We have seen WTI crude trading as high as $76.
With increase in output from OPEC and America and easing the
sanctions on Iran, we saw a Crude Oil prices trading in red in past few weeks.
There was hardly any upside but now seems a time when high
production might be cut and we could see Crude Oil prices again gaining
momentum
I would advise a long position in Crude at 4050 for target
of 4150. Alternatively, I don’t see Crude trading above 4300 with current
updates so one can Short Crude Oil at 4200 for target of 4070.
Please maintain strict Stop loss since both counters are
volatile and one statement can change trends.
Please read Disclaimer before investing
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