Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.
Trading positions
- WTI Crude Oil No position currently justified on a risk-to-reward point of view.
- Natural Gas [NGK22] Long around the $5.983-6.287 support area (yellow band) with Stop at $5.505 (monthly swing low) and targets at $6.954 & $7.365.
Given the exponential rise in natural gas, I do expect a major correction, leading to lower levels. Optimally, a rebound could happen onto the next lower support where I would see bulls getting back in, placing long orders to trigger the next bounce up. There still seems to be a long way to go, so some of you may think: why not short such an exhausted market down to those levels over there? My answer would just entail the following facts:
- NG is still in an overall upward trend, supported by demand, especially driven by Liquefied Natural Gas (LNG) exports;
- Fundamentals are showing some exhaustion on the one hand – also confirmed by the low print on the market profile, with a market rejection above the value area/upper blue line ($7.200), which may signal a stabilization in demand;
- It is always better to trade with the trend.
Henry Hub Natural Gas (NGK22) Futures (May contract, daily chart)
That’s all folks for today. Happy trading!
As always, we’ll keep you, our subscribers well informed.
Thank you.
Sebastien Bischeri
Oil & Gas Trading Strategist
