It has been long since I last published about trading tips and I am back with one of my favorite and most volatile commodity, Natural gas. It is a great seasonal commodity and in my last article I had suggested to create long positions. I am sure who followed, made a huge profits already.
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Natural gas is back in the list for many traders since Gold and Silver counter have seen a huge growth and there is pullback in both counters. During this time of the year, Nat Gas becomes a little more volatile than usual. You would notice many traders start tracking this counter starting mid-Aug.
On Tuesday we saw Nat Gas prices trading in green in MCX with little movement. Natural gas prices are testing support levels. This week traders have their eyes on tropical storm Imelda which is circling near the Texas Coast, and expectations are that the storm will make landfall in Texas. This storm looking at current forecast is unlikely to generate issues for natural gas infrastructure. Supply in the latest week was flat while demand ticked higher.
Technical and fundamental analysis
Natural gas Sep contract has been trading above 189 in past few sessions and this is a bullish sign but with recent bullish movements, we can expect a slight pull back or sideways trade. Buyers will be seen dominating this market. Prices have been consolidating and we can expect slight movement until we see any major update from Imelda.
Natural gas storage report – EIA information
According to recent numbers from EIA, Natural gas consumption rose by 2% this week over the previous one and supply remained unchanged. This could act as a support for buyers.
Natural Gas price forecast
We can expect Nat gas futures to trade anywhere from 190 to 195. The prices are expect to touch 205 for the September contract by end of this month.
Market will find a high pricing since there is added buzz around this time of the year with start of winter season.
Trading tip
Traders are advised to create long-term positions. Buy Nat gas September contract at 191 for target of 193-195 with stop-loss of 189.
Long term traders should enter position in October contract with a target of 210 by mid- Oct.
Are you still holding a short trade?
If you are holding a short position, square-off and jump out. Nat Gas has low chances of changing trend at this point. Instead buy few units to cover your losses or wait till first week of December. Nat Gas is a volatile commodity and holding your position for long against the trend could lead to losses.
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