Natural Gas

All updates posted here are NOT real time and have a time-lag up to few hours to days depending on the bandwidth available with us to post here and on twitter. The updates are meant for information only. For the purpose of trading, real time updates are critical and mandatory. 

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Original post to Members - 10th Sep 2020  

Posted here - 11th Sep 2020

[Natural Gas October Futures Update] In line with the previous update (tagged), NG receded exactly from the key resistance at 2.480-2.510, tested the key support at 2.320-2.345 & has now bounced off it again.

A great example of NG's compliance with technical waves & fib structures even in corrective wave set ups that are full of frequent whipsaws.

The overall technical update remains the same. Re-summarizing it below:

The key resistance continues to remain at 2.480-2.510. Only a sustained break of this level has the potential to provide further traction to this bounce off the key support. Failure to surpass this resistance shall set up another test of the key support at 2.320-2.345 followed by 2.223-2.260.

Original post to Members - 8th Sep 2020  

Posted here - 11th Sep 2020

[Natural Gas October Futures Update] In line with the previous update (tagged), NG reached the micro-level key resistance at 2.580-2.620 on Friday and then receded from it.
 

Failure to surpass this immediate key resistance shall set up another test of the key support at 2.375-2.410.

 

Please note that NG is currently in a corrective wave. Such a wave can be very irregular and full of whipsaws. Hence, it is important to operate only near key levels with small positions & tight stop losses.

 

Original post to Members - 31 Aug 2020  

Posted here - 02nd Sep 2020

[Natural Gas October Futures Update] This is a micro-level update. Kindly note the calibrated key levels. For macro outlook, please refer to the tagged update

NG has receded from the larger degree key resistance at 2.743-2.775 and is now approaching the key support at 2.490-2.495. 

Any sustained break of this level shall target the next key support at 2.450-2.462 followed by 2.371-2.401.

The nearest micro-level key resistance is at 2.603-2.615. NG will need to take out this level if it intends to test the larger degree key resistance zone again.

Original post to Members - 27 Aug 2020  

Posted here - 01st Sep 2020

[Natural Gas October Futures Update] Let's review the micro & nano-level patterns along with their parameters

NG has now formed a new layer of key support at 2.540-2.550 above the previously formed key support at 2.490. 

NG will need to operate above these two supports if it intends to display continued bullishness on an immediate basis. In other words,  a sustained break of 2.54 shall trigger another attempt at a deeper retracement to the key support at 2.490 followed by 2.375-2.401.

At a nano-level, NG has a local resistance at 2.720, which it is currently negotiating. Only a sustained break of this level shall target the next key resistance at 2.750-2.779

Original post to Members - 19th Aug 2020  

Posted here - 23rd Aug 2020

[Natural Gas September Futures Update] In July, when NG had completed several weeks in a bearish pattern, we had identified & followed a wave(i)-(ii) technical set up to progressively determine NG's transition from a bearish to a bullish set up. Subsequently, we articulated & tracked a strong bullish wave(iii) pattern which has played out quite well, extended itself & is now within striking distance of 2.5. 

It is time to review the detailed technicals & parameters again:

At a macro-level, NG remains in a bullish set up as long as it is above the critical key support at 1.96-1.99 and preferably above the key support at 2.055-2.073

At a micro-level, NG has receded exactly from the larger degree key resistance around the 2.46 zone shared in the previous update. This key resistance level has been calibrated to 2.465-2.507 in view of the potential nano-extensions that can play out sometimes.

The first attempt to take out the key resistance has failed so far. Inability to break this level has the potential to trigger a correction/pullback in NG. The immediate key support is at 2.250-2.272

It is important to note that NG is now approaching larger degree key resistance areas. Hence, it shall be a good idea for longs to continuously move or trail their stop losses to protect their gains.

Please know your parameters and plan accordingly

 

 

Original post to Members - 14th Aug 2020  

Posted here - 23rd Aug 2020

 

[Natural Gas September Futures Update] NG has been doing a good job of oscillating between the support & the resistance in the last few days providing some good short term trading opportunities.

NG bounced off very close to the larger degree key support at 2.05-2.073 mentioned in the previous update (tagged) & has now broken through the 2.295 key resistance. The next key resistance is at 2.345-2.382. (slightly calibrated)

A sustained break of 2.382 shall target the next key resistance at 2.46.

 

Original post to Members - 10th Aug 2020  

Posted here - 14th Aug 2020

 

[Natural Gas September Futures Update] While NG has seen a healthy bounce of the key support at 2.102-2.120, it has still not been able to fully capitalize on this opportunity to pose a serious challenge to the key resistance at 2.26-2.295 yet. Meandering around the current price points will not help much.

Unless 2.295 is taken out in an impulse manner, the key support at 2.102-2.120 remains exposed, a break of which shall target the larger degree key support at 2.05-2.073

 

Original post to Members - 6th Aug 2020  

Posted here - 10th Aug 2020

 

[Natural Gas September Futures Update] NG has bounced off the key support at 2.115-2.140 as shared in the previous update (tagged). For immediate continued bullishness, it is important for NG to operate above this support. 

 

The key resistance at 2.26-2.295 continues to remain the nearest hurdle, where NG has failed a few times, earlier this week. Only a sustained break of 2.295 shall target the next key resistance at 2.36-2.37.

 

Original post to Members - 4th Aug 2020  

Posted here - 5th Aug 2020

[Natural Gas September Futures Update] At a micro-level, NG continues to remain in a bullish set up as long as it operates above the key support at 1.993-2.015. Only a sustained break of this level shall question the count & require us to review & elaborate alternate scenarios.

At a nano-level, NG has been probing the key resistance at 2.14-2.19 multiple times, but has receded from it repeatedly. A few mins back, pullback from the resistance reached very close to the key support at 2.040-2.052 & bounced off it again.

As long as the supports hold, NG has the license to make multiple attempts to probe the key resistance at 2.14-2.19. A sustained break of 2.19 shall target the next key resistance at 2.26-2.29.

Original post to Members - 4th Aug 2020  

Posted here - 5th Aug 2020

[Natural Gas September Futures Update] In line with the previous update, NG has hit the key resistance at 2.14-2.19 & receded from it. At the same time, a couple of key supports have formed close to where the price action is.

At a nano-level, key supports have formed at 2.040-2.052 followed by 1.993-2.015. If these supports can hold during any smaller degree pullback, another test of the key resistance at 2.14-2.19 remains on the cards.

Needless to repeat, it is dangerous to trade against the trend in wave(iii)

Original post to Members - 3rd Aug 2020  

Posted here - 3rd Aug 2020

 

[Natural Gas September Futures Update] Since last one week, we have been closely monitoring the bullish wave(iii) set up in NG, one step at a time. We imposed "specific conditions" on NG to break a certain resistance level [in wave(i)] & then provide a "reactionary pullback" [in wave(ii)] back to the support. 

In wave terminology, this is called a wave(i)-(ii) set up which gives birth to a wave(iii), the longest, fastest & the smoothest wave. It is remarkable how the "waves & fibs framework" is able to forecast a potential move, well before it happens.

Back to the Technicals

What we witnessed in the last couple of hours is a bullish wave(iii) in action. NG has now formed a key support at 1.95-1.96. As long as this holds, NG can continue to extend the wave(iii) to the next key resistance at 2.14-2.19 (slightly calibrated).

Only a break below 1.95 shall question the larger degree bullish count & will require a reevaluation of this scenario.

Needless to repeat, it is dangerous to trade against the trend in wave(iii)

 

 

Original post to Members - 3rd Aug 2020  

Posted here - 3rd Aug 2020

[Natural Gas September Futures Update] NG has seen an impulse bounce off the key support near 1.79-1.80 after the reactionary pullback last week. The next immediate hurdle for NG is the key resistance at 1.95-1.97 (slightly calibrated).

 

NG needs to provide a decisive break of 1.97 to support the case for a bullish wave(iii) set up that can target the next key resistances at 2.05-2.07 followed by 2.14-2.18.

Immediate key support zone is at 1.85-1.89 followed by a critical key support at 1.77-1.78.

 

 

Original post to Members - 30th July 2020  

Posted here - 1 Aug 2020

[Natural Gas September Futures Update] NG is now in a reactionary pullback as articulated in the previous update (tagged). For a wave(iii) bullish set up to play out, it will need to ensure that the key support at 1.730-1.750 (slightly calibrated) is not violated. A sustained break below 1.730 shall disrupt this potential.

At a nano-level, a key support has formed at 1.82-1.83 followed by 1.79-1.80

The key resistance is now at 1.937, a break of which shall target the next key resistance at 2.05-2.06

 

 

Original post to Members - 29th July 2020  

Posted here - 30th July 2020

[Natural Gas September Futures Update] In the previous update (tagged), we had articulated the first condition for NG to make a 'bearish to bullish' transition

NG has taken out the key resistance at 1.871-1.908 to meet the initial part of the first condition for a bullish wave(iii). NG will now need to meet the latter part of the first condition which is to ensure that any reactionary pullback does not violate the key support at 1.730-1.742.

A new layer of key support has also formed at 1.79-1.80. 

If the first condition is completely satisfied, then NG shall hold the potential to first target the next key resistance at 2.05-2.06 in the days to come.

NG should always be traded in small positions & with a stop loss

Original post to Members - 29th July 2020  

Posted here - 30th July 2020

[Natural Gas September Futures Update] As NG makes an attempt to probe the key resistance at 1.871-1.908 for the second time in the last 24 hours, let us review the potential scenarios & their respective parameters.

NG is again approaching an opportunity to make a 'bearish to bullish' transition. While NG has disappointed consistently at the resistances over the last few months, every new pattern needs to be analyzed without any "recency bias" & with an open mind. Like every time, we shall impose a set of technical conditions on NG to make the case for a transition.

The first condition shall be to take out the key resistance at 1.871-1.908 in an impulse manner & ensure that any reactionary pullback does not violate the key support at 1.730-1.742. If NG is able to meet this condition, then it shall reignite the bullish potential & begin developing an early wave(iii) structure targeting higher levels.

On the other hand, failure to meet the first condition shall maintain the status quo, which will continue to exert downward pressure on the prices.

Know your parameters & plan accordingly

 

 

Original post to Members - 28th July 2020  

Posted here - 28th July 2020

 

[Natural Gas September Futures Update]  Please note the change in contract from August to September

With the contract rollover, the patterns have been updated. Kindly refer to the updated key levels

It is very easy to lose count of the number of opportunities NG has squandered in the last few months to make a 'bearish to bullish' transition. Every single time, it has failed to deliver at the key resistances. In fact, NG price action has been depending on "contango" during roll overs to survive in the higher price range. 

Contango is the phenomenon that occurs when the price of futures contracts is higher than that of the spot price or the immediate contracts. It results in negative roll yield which means investors/positional (longer term) traders have to pay during roll over of future contracts. For example:- NG - Nov, Dec, Jan contracts have a wide contango & are trading in the 2.35-2.90 range & NG - Oct is trading near 1.95

Back to Technicals

At a macro-level, NG has formed a key resistance at 1.871-1.908. As long as this holds, downward pressure shall remain.

The nearest key support is at 1.730-1.742. NG shall need to operate above this support if it intends to reignite any opportunities to challenge the key resistance. Failure to hold above this level shall expose the critical key support at 1.635-1.650, a break of which shall open the gates to significantly lower levels.

 

Original post to Members - 20th July 2020  

Posted here - 26th July 2020

[Natural Gas August Futures Update] Bears remain in complete control breaking through each of the support walls with ease. Bulls are hardly putting up a fight. 

While at the micro-level, NG has some support in the 1.61-1.64 zone, the critical key support comes in at 1.57-1.592. Failure to defend this important support shall open the gates to a new micro-pattern which can target significantly lower levels. We shall elaborate this scenario in an event of a break.

The key resistance continues to remain at 1.802-1.808 (slightly calibrated).

Original post to Members - 18th July 2020  

Posted here - 19th July 2020

[Natural Gas August Futures Update] NG has broken the key support at 1.705-1.711 in line with what a bearish set up is expected to do. NG shall now enter an area which has a number of adjacent support zones.  The nearest one is a local support at 1.672 followed by the key support at 1.611-1.647.

The key resistance continues to remain at 1.798-1.804.

Weekend exposure in NG often introduces thin volume based gaps in price on Monday. Since these gaps tend to be binary in nature, it is prudent to stay away from such exposure. We will take a fresh look & re-evaluate this micro-pattern next week.

Original post to Members - 17th July 2020  

Posted here - 19th July 2020

 

[Natural Gas August Futures Update]  The nano level resistance at 1.798-1.804 did a pretty good job of stopping NG's further advance towards the key resistance at 1.835-1.865. 

NG is now approaching the key support at 1.705-1.711, a break of which shall expose the next key support at 1.611-1.647 (calibrated).

Important to remember that NG continues to remain in a larger degree bearish set up until it provides a sustained break of the key resistance at 1.835-1.865 OR generates a new signal at a lower level. 

The move is another good example of how markets simply move from one technical level to another in the form of waves.

Original post to Members - 14th July 2020  

Posted here - 16th July 2020

[Natural Gas August Futures Update] In line with the previous update (tagged), NG clearly failed to break the key resistance at 1.835-1.865 and is now meandering around the key support at 1.72-1.735. If the support is unable to trigger a corrective bounce, then a sustained break of 1.72 shall expose the next key support at 1.645-1.658. 

A local support has also formed at 1.69-1.70.

Critical Key levels >> Key levels >> Local levels (in terms of strength

 

Original post to Members - 11th July 2020  

Posted here - 13th July 2020

 

[Natural Gas August Futures Update] While NG has bounced off the key support at 1.72-1.735, you might have noticed that bears already have their first line of defense ready at the key resistance at 1.83-1.86. 

If bulls are serious about reigniting the possibilities of building another bullish wave(iii) set up, they will need to figure out a way to take out this first layer of resistance quickly. Failure to do that shall set up a retest of the key support at 1.72-1.735

Original post to Members - 10th July 2020  

Posted here - 13th July 2020

[Natural Gas August Futures Update] A wave(iii) set up in trading is analogous to a penalty kick in soccer. It is a golden opportunity to deliver & score a winner. NG has squandered away two back to back "penalty kick" opportunities this week to score a bullish wave(iii) which would have helped it make a complete "bearish to bullish" transition. 

With the sustained break of 1.77 support earlier today, NG has opened the gates to a few bearish alternatives. 

A bearish scenario dosen't mean that NG will only move down in a linear manner in only one direction. There will always be micro-level corrective bounces. What it means is that the bears shall now begin building newer resistance walls or forts closer to where the price action is, with the intention to push the prices lower.

At a macro-level, NG has formed a critical key resistance at 1.924. As long as this holds, bears will continue to build newer resistances to exert downward pressure on the prices. 

At a micro-level, a new key resistance has formed at 1.83-1.86 which shall attempt to defend any smaller degree corrective bounces.

A key support has formed at 1.72-1.735 which has the potential to trigger a corrective bounce. A sustained break of this level shall expose the next key support at 1.645-1.665.

 

Original post to Members - 10th July 2020  

Posted here - 13th July 2020

 

[Natural Gas August Futures Update] As mentioned in the previous update (tagged), NG shall continue to attempt a transition to bullish wave(iii) as long as it operates above the key support at 1.77-1.775.  The immediate hurdle in this transition process is the key resistance at 1.924 followed by 1.96.

If these two hurdles are taken out, wave(iii) has the potential to extend to the larger degree key resistance at 2.105-2.120.

Needless to repeat, a sustained break of 1.77 shall open up bearish alternatives and be unfavorable for longs.

Original post to Members - 9th July 2020  

Posted here - 10th July 2020

[Natural Gas August Futures Update] NG failed in its first attempt to transition into a bullish wave(iii). The set up was there for the taking, but NG avoided it & instead chose to correct from the key resistance at 1.924. 

NG has the license to attempt it again as long as it operates above the key support at 1.77-1.775.

 

A sustained break of this key support may open up bearish alternatives again. Longs should be careful below 1.77.

Original post to Members - 7th July 2020  

Posted here - 10th July 2020

[Natural Gas August Futures Update] Please read carefully as there are too many numbers.

The second condition boundaries have been respected so far. The pullback in NG has clearly stayed above the key support at 1.69-1.73. NG is now in the process of attempting a wave(iii).

For a bullish wave(iii) to fully form & deliver from here, NG shall now have to operate above the key support at 1.77-1.775 and preferably above the key support at 1.837-1.842.

If these supports hold, then wave(iii) shall attempt a break of the next key resistance at 1.96-1.965 & also has the potential to target the key resistance at 2.105-2.120.

That said, it is important to understand the risks too, so that they can be managed prudently. A break below 1.837 has the potential to disrupt the current wave(iii) set up and open up an equal probability alternate scenario for the wave(ii) correction to extend lower to the key support at 1.69-1.73 or critical key support at 1.64-1.65 before attempting a new wave(iii) again.

Know your parameters & plan accordingly

Original post to Members - 6th July 2020  

Posted here - 10th July 2020

[Natural Gas August Futures Update]

The FIRST condition of bottoming seems to have met. Let's quickly recall & review it.

The first condition is for NG to operate above the newly formed critical key support at 1.64-1.65 and then push higher to break the next key resistance at 1.785-1.825.

This is exactly what has played out so far.

What next ?

A new layer of key support has now formed at 1.69-1.73. The critical key support continues to remain at 1.64-1.65. Bulls will need to ensure that any pullback/correction in NG stays above the supports and does not break them. 

This shall now be the SECOND condition.

If the second condition is satisfied without any disruption, then NG will see the birth of wave(iii) which will create a set up for NG to move significantly higher in the days to come. 
 
In wave terminology, there are early signs that a larger degree wave(i) might have completed from 1.5 to 1.86.  A wave(ii) correction or retracement seems to be currently underway which needs to complete above or at the support areas. This wave(i)-(ii) set up, after completion, has the potential to unleash a bullish wave(iii). 

The wave pattern is valid above 1.64. In other words, if the second condition is not met & the support regions are broken, then NG goes back to square one and all the effort to meet the first condition was in vain.

Original post to Members - 30th June 2020  

Posted here - 5th July 2020

[Natural Gas August Futures Update] In the last update (tagged), we had clearly spelt out the first condition for a bottoming process. Let us recall it:

The first condition is for NG to operate above the newly formed critical key support at 1.64-1.65 and then push higher to break the next key resistance at 1.785-1.825. If NG breaks below 1.64, then bulls may have to take another disappointment in their stride.

NG got so close to meeting the first condition and then pulled back exactly at the lower bound of the key resistance at 1.785-1.825. This is what we call "missed by a whisker."  

That said, as long as it is above the critical key support at 1.64-1.65, it has the license to make another attempt. 

Meanwhile, a local support has also formed at 1.665-1.68, very close to the critical key support.

Critical Key levels >> Key levels >> Local levels (in terms of strength)

 

 

Original post to Members - 25th June 2020  

Posted here - 25th June 2020

 

[Natural Gas August Futures Update] Kindly note the change in contract from July to August 

As NG approaches the key support at 1.55-1.56, it is time to reinforce the note from a previous update.

Important to constantly remind & emphasize that NG remains deep inside a bearish set up. Any bounce off the key supports shall be small & corrective in nature. Unless NG demonstrates the ability to surpass at least nano-level resistances, exploring countertrend long positions in NG may be unproductive.

A sustained break of the key support at 1.55-1.56 shall target the next key support at 1.475-1.507. 

Key resistance continues to remain at 1.713-1.733.

 

 

Original post to Members - 25th June 2020  

Posted here - 25th June 2020
 

[Natural Gas August Futures Update] Kindly note the change in contract from July to August

The only addition to the previous update (tagged) is that at the nano-level, NG has now formed a key resistance at 1.713-1.733. As long as this holds, NG has the potential to target the next key support at 1.55-1.56.

 

Original post to Members - 24th June 2020  

Posted here - 24th June 2020

[Natural Gas August Futures Update] Kindly note the change in contract from July to August

In the previous update, we had mentioned that NG shall target the key support at 1.642-1.658. NG has arrived and is currently negotiating with the support. 

Important to constantly remind & emphasize that NG remains deep inside a bearish set up. Any bounce off the key supports shall be small & corrective in nature. Unless NG demonstrates the ability to surpass at least nano-level resistances, exploring countertrend long positions in NG may be unproductive.

A sustained break of the key support at 1.642-1.658 shall target the next key support at 1.55-1.56. 

Key resistance continues to remain at 1.800-1.825.

 

 

Original post to Members - 15th June 2020  

Posted here - 16th June 2020

[Natural Gas July (Aug) Futures Update] Please note that Aug futures levels are provided in parenthesis & non-bolded text

At a macro-level, NG has now formed a critical key resistance at 1.83-1.85 (1.922-1.942). As long as this holds, NG shall continue to remain in a larger degree bearish set up. 

At a micro-level, while NG did attempt a flash (super quick) corrective bounce from the key support at 1.66-1.67 (1.752-1.762) last week, the effort was rendered meaningless as it fell short of reaching even the nearest key resistance zone.

Bears are now negotiating with the key support at 1.66-1.67 (1.752-1.762) for the last several hours.

 

This is really the final opportunity for NG to muster a rebound. A sustained break here shall open the gates to the next key support at 1.56-1.57  (1.652-1.662).

Original post to Members - 13th June 2020  

Posted here - 16th June 2020

[Natural Gas July (Aug) Futures Update] Please note that Aug futures levels are provided in parenthesis & non-bolded text

NG has broken the key support at 1.75-1.76 (1.838-1.848) after meandering around it listlessly for several hours. While this break is a setback for the micro-bounce, the previous key support at 1.66-1.67 (1.744-1.754), which was the originator of this bounce, is continuing to hold the integrity of this pattern.

Weekend exposure in NG often introduces gaps in price on Monday. Since these gaps are binary in nature, we prefer staying away from such exposure. We will take a fresh look & re-evaluate this micro-pattern once the markets open on Monday.

 

Original post to Members - 8th June 2020  

Posted here - 11th June 2020

[Natural Gas July (Aug) Futures Update] Please note that Aug futures levels are provided in parenthesis & non-bolded text

Not much has changed. Surpassing 1.86-1.865 (1.96-1.965) key resistance zone still remains elusive. The region has held about five times so far. 

A new key support has now formed at 1.745-1.756 (1.845-1.866). At a nano-level, NG has bounced off this support. Lower level key supports continue to remain at 1.71 (1.81) followed by 1.66-1.667 (1.76-1.767).

The only notable observation is that the 1.86-1.865 level is slowly gaining in importance after holding its ground so many times over the last few days. It may play the role of a principal signal for the next "high probability" micro-pattern whenever it is challenged again. We shall elaborate this scenario in an event of a sustained break of 1.865.

Original post to Members - 3rd June 2020  

Posted here - 5th June 2020

[Natural Gas July Futures Update] As you might have noticed, NG is repeatedly attempting to surpass the key resistance at 1.86-1.865. It has now failed at this zone twice since Friday. 

In the bigger picture, even if NG were to surpass the first level, there is another key resistance waiting nearby at 1.90-1.91. This is only at the micro-level. When we move to a larger degree (macro time frame), there are two more critical key resistances at 1.97-1.98 and 2.02.

In a nutshell, bears have done a decent job of building multiple forts in the 1.85-2.02 zone to defend any attempts by the bulls. NG will need to take out all these forts, preferably through an impulse move to open the gates to bullish scenarios.

The next key supports continue to remain at 1.71 followed by 1.66-1.667

Original post to Members - 2nd June 2020  

Posted here - 5th June 2020

[Natural Gas July Futures Update] At a macro-level, 1.97-1.98 is now a critical key resistance. As long as this holds, NG continues to remain deep inside a bearish set up. 

The micro-corrective bounce last week failed to exceed even the first hurdle at the key resistance at 1.86-1.865 (shared in the previous update). In fact, the price reversed exactly at 1.86.

As long as these resistances hold, NG has the potential to target the next key support at 1.71 followed by the critical key support at 1.612-1.636.

Longs are best avoided in NG until it demonstrates reasonable bullish intent & provides a meaningful trade set up by taking out at least a couple of important resistances.

Original post to Members - 28th May 2020  

Posted here - 1st June 2020

[Natural Gas July Futures Update] NG is currently negotiating the key support at 1.826-1.842 with the bearish storage report affecting a breach of the upper bound of this support zone. 

We had mentioned in the earlier updates that NG needs to hold this zone if it intends to work out atleast a micro-level corrective bounce. 

A sustained break of this level will provide fillip to the existing macro-level (larger degree) bearish set up & has the potential to open the gates to much lower levels. We shall elaborate a "high probability" pattern in the event of such a break. 

1.97-1.98 is now a new layer of key resistance followed by 2.03.

Original post to Members - 21st May 2020  

Posted here - 1st June 2020

[Natural Gas June (July) Futures Update] Please note that the July future levels are in parenthesis & in non-bolded text.

NG was vehemently rejected from near the critical key resistance at 1.895-1.908 (2.032-2.045) yesterday and is now probing the key support at 1.717-1.730 (1.854-1.867).  In an event this support sees a sustained break, the next nearby key support resides at 1.67-1.68.

"Stairs Up, Elevator Down" sums up the NG story for the last many weeks.

Original post to Members - 15th May 2020  

Posted here - 1st June 2020

[Natural Gas June (July) Futures Update] Please note that the July future levels are in parenthesis & in non-bolded text.

There is not much to add to the previous update except for small revision of July levels since the contango spreads are constantly changing. Summarizing the update again.

NG has reversed very close to the key resistance at 1.74-1.77 (1.924-1.954) shared in the previous update. 1.802-1.810 (1.986-1.994) continues to remain the critical key resistance. 

NG shall have to provide an impulse break of the above levels to provide any early indications of a shift in the current bearish trend.  These levels shall be the first line of defence for the bears in the event of any corrective bounce.

If NG fails to surpass the above resistances, it can set up the test of the critical key support at 1.478-1.496 (1.662-1.680) in the next wave down.

Local supports are at 1.595 (1.779), 1.576 (1.760) & 1.534 (1.718) that may trigger brief corrective bounces.

Critical Key levels >> Key levels >> Local levels (in terms of strength)

Original post to Members - 06th May 2020  

Posted here - 1st June 2020

[Natural Gas June (July) Futures Update] Please note that the July future levels are in parenthesis & non-bolded text.

NG shall continue to remain under downward pressure as long as it is below the key resistance at 2.033-2.058 (2.293-2.318) & critical key resistance at 2.16 (2.42). Only a break OR at least a contact with these levels shall require a re-evaluation of the macro-pattern.

At the micro-level, 1.935-1.968 (2.195-2.228) is now a key resistance zone. As long as this holds, a test of the key support at 1.76-1.78 (2.02-2.04) remains on the table.

Original post to Members - 29th April 2020  

Posted here - 11th May 2020

[Natural Gas June Futures Update] NG has seen some reasonable upside in the last few hours. It is now very close to a zone of congestion with multiple local resistances between 2.01-2.075. 

One of the reasons for a wide congestion zone is that NG has failed to cross this area too many times over the last many weeks. This results in formation of multiple fib levels that act as resistances.

If it surpasses this zone, it will be met with the critical key resistance zone at 2.10-2.15. A sustained break of 2.15 shall restore a bullish wave(iii) in NG to significantly higher levels. We shall elaborate the levels in an event NG gets closer to a sustained break.

Key support is at 1.825 followed by 1.765.

Original post to Members - 25th April 2020  

Posted here - 11th May 2020

[Natural Gas May (JUNE) Futures Update] Please note that June future contract key levels are provided in the parenthesis. Also June levels have been slightly adjusted since the relative spreads are constantly changing.

Owing to its failure to break the key resistance at 1.95 (2.07) earlier this week, NG has now made its journey downward to the key support zone at 1.72-1.752 (1.87-1.902) as shared in the previous update.

It is important to note that we are at contract expiration (May) where large number of traders shall plan to reduce their risk and optimize profits as they unwind their sizable futures and options positions. 

In an event, 1.72 (1.87) sees a break on account of expiry volatility, the extension supports are at 1.705 (1.85) followed by 1.648-1.670 (1.78-1.81).

Original post to Members - 17th April 2020  

Posted here - 19th April 2020

 

[Natural Gas MAY Futures Update] 

NG is always super-obedient to technicals. We have so far captured the bounce from the key support zone at 1.52-1.57, then a move to key resistance zone at 1.698-1.720 & now a move to the key resistance at 1.80-1.82.

What's next ?

NG is currently probing the key resistance at 1.80-1.82. A sustained break of this level shall expose the next key resistance at 1.92.

A key support has formed at 1.70 followed by a critical key support zone at 1.63-1.66.

It is important for 1.63 to hold to maintain the integrity of the current bullish pattern. Also, it is necessary to note that NG is not out the woods until it surpasses 1.92 levels.

One prudent way to trade NG is to book partial gains at important key levels & reload them on corrections. This ensure continuous accumulation of small gains

Original post to Members - 17th April 2020  

Posted here - 19th April 2020

[Natural Gas May (June) Futures Update] Please note that June future contract key levels are provided in the parenthesis. Also June levels have been slightly adjusted since the relative spreads are constantly changing. 

 

Nice technical bounce off the key support zone at 1.52-1.57 (1.668-1.720). 

NG is currently negotiating with the key resistance zone at 1.698-1.720 (1.858-1.880). In an event this zone sees a sustained break, NG shall then target the next key resistance at 1.80-1.82 (1.960-1.980).

Original post to Members - 16th April 2020  

Posted here - 19th April 2020

[Natural Gas May (June) Futures Update] Please note that June future contract key levels are provided in the parenthesis. Also June levels have been slightly adjusted since the relative spreads are constantly changing. 

 

NG is now well into the key support zone at 1.52-1.57 (1.668-1.720). In attempting a technical bounce here, it shall have to AT LEAST cross 1.669 (1.818) which is a newly formed key resistance and then also surpass the key resistance zone at 1.698-1.720 (1.846-1.868) to generate traction.

This shall be a minimum & necessary condition for a meaningful bounce.

Original post to Members - 13th April 2020  

Posted here - 19th April 2020

[Natural Gas May Futures Update] NG has formed a key resistance zone at 1.844-1.863 followed by the critical key resistance at 1.92. Only a sustained break through 1.92 shall open up "bottom in place" scenarios & shall require a revision of the pattern.

As long as the resistances hold, NG has the potential to target the next key support zone at 1.644-1.622.

 

Original post to Members - 9th April 2020  

Posted here - 19th April 2020

[Natural Gas May Futures Update] NG is one of the most obedient instruments when it comes to key technical levels.

In our previous update, we had mentioned that NG has a critical key support at 1.740-1.750. If you notice, NG has been continuously negotiating with this important level and is attempting to bounce off it now. The bounce needs to make a better effort.

At a nano level, NG has formed a key resistance zone at 1.825-1.844. For this bounce to be meaningful, NG needs to surpass 1.825-1.844 quickly without which NG will continue to make another attempt to test the critical support level. A sustained break of this critical level can expose the next key support at 1.622.

Original post to Members - 2nd April 2020  

Posted here - 19th April 2020

[Natural Gas May Futures Update] Bears are busy building resistance walls continuously while bulls are backing off without any fight. That's been the NG story for a while now. 

As mentioned previously, on the macro, the key resistances remain at 1.82 & 1.78. As long as these hold, the bears shall remain in control & the prices shall continue to move lower.

On the micro, the key resistance is at 1.735 which was rejected yesterday. A new layer of key resistance has also formed at 1.691.

1.561 is now a critical key support.

Original post to Members - 26th March 2020  

Posted here - 19th April 2020

[Natural Gas May Futures Update] 

Unless the key resistance at 1.78 and the critical key resistance at 1.82 is taken out decisively, all bounces shall be meaningless and will only lead to reversals. Yesterday too, NG reversed from the 1.78 key resistance zone.

A new layer of key support zone has now formed at 1.620-1.637, a break of which can open the gates to new lows.

Bottom fishing, trading against the trend, weekend exposure, aggressive trading without stop losses, averaging losses, hedging without a plan are dangerous and best avoided. Kindly operate with the best trading discipline near key levels with small positions and tight stop losses during this window.

Original post to Members - 13th March 2020  

Posted here - 19th April 2020

[Natural Gas April Futures Update] Positional View (Few weeks to months).  Please follow carefully.

Natural gas is at a key inflection point in its macro-pattern. This inflection point is the critical key resistance zone at 1.998-2.037. Unless this region is taken out, we cannot consider NG to have bottomed.

If you notice, NG is repeatedly making its best effort to probe this region, but is getting rejected at a lower level key resistance each time.

What happens if NG BREAKS 2.037?

A sustained break of 2.037 puts NG in a bullish set up. That dosen't mean NG will move higher only in one direction. It means that NG shall immediately form a wave(i) higher at ~2.07-2.14 levels and then provide a brief correction in wave(ii) anywhere in the 1.78-2.00 zone before setting up a wave(iii) for 2.25+ & higher in the weeks & months to come. 

It shall also mean that NG has formed a multi-year bottom at 1.61. Bullish set up means that all downward moves are only corrective/retracement for a much bigger move upward in the future. It also means that in a bullish setup, the preferred strategy for trading should be to "buy on dips" & to avoid trading wave(ii) & (iv) which are against the trend.

 

What happens if NG DOES NOT break 2.037?

It is then likely to head to the key support at 1.745 and shall attempt to break it. If this breaks, the 2016 low of 1.61 shall get exposed. After forming a bottom at 1.61 or lower, it shall reverse to attempt 2.037 again.

From a trading point of view, if you are a positional trader, you should operate with these two larger macro-pattern scenarios in mind. The daily updates shall cover the smaller micro-patterns &  key levels for intraday/swing traders.

Original post - 4th Mar 2020  

Posted here - 4th Mar 2020

[Natural Gas April Futures Update]

The latest short range model has lost 8 HDDs.

The critical key resistance at 1.825 was attempted earlier today. While there was a minor breach, it did not result in a sustained break.

NG has a critical key resistance zone at 1.825-1.84 followed by 1.874. As long as these resistances hold, NG has the potential to target the key support at 1.664 followed by 1.63.

A break of 1.63 shall expose the MAJOR key support zone at 1.54-1.48.

Natural gas in winter is best traded with small positions and with a tight stop loss near key levels. This ensures good risk management under all circumstances.

 

Original post - 28th Feb 2020  

Posted here - 4th Mar 2020


[Natural Gas April Futures Update]  NG clearly failed to break over the key resistance at 1.78 yesterday. As a result, NG dropped to the critical key support zone at 1.648-1.63, as shared in the previous update, earlier today. NG has also seen a quick bounce off this support level.

A new key resistance has now formed at 1.753. If NG cannot take out 1.753 & 1.789 key resistances impulsively, all bounces shall be unsustainable and another reversal to break the critical key support at 1.63 remains on the cards.

In an event 1.63 sees a break, NG has the potential to target the MAJOR key support zone at 1.54-1.48.

The latest short range has lost -1 HDD.

Natural gas in winter is best traded with small positions and with a tight stop loss near key levels. This ensures good risk management under all circumstances.
 

Original post - 26th Feb 2020  

Posted here - 4th Mar 2020

[Natural Gas April Futures Update]

In line with the previous update, the critical key support at 1.721 has held its ground. Another great example of how well the key levels hold & operate. That said, the reactionary bounce off the 1.721 support has not been very encouraging so far.

For the bounce to be meaningful and the price to gain traction, it shall have to surpass AT LEAST the two key resistances at 1.78 followed by 1.824. If these two levels are not taken out impulsively, a reversal to break the critical key support at 1.72 is just a matter of time.

In an event 1.72 sees a sustained break, NG shall attempt to target the next key support zone at 1.686-1.67 followed by the critical key support zone at 1.648-1.63.

The latest short range has gained +1 HDD.

Natural gas in winter is best traded with small positions and with a tight stop loss near key levels. This ensures good risk management under all circumstances.

 

Original post - 20th Feb 2020  

Posted here - 4th Mar 2020

[Natural Gas March Futures Update] NG has now touched at the upper range of the key resistance zone at 1.984-2.028. Only a sustained break of this zone can target the next key resistance zone at 2.07-2.09.

Longs from 1.75-1.77 zone from last week should book gains or move stop losses to protect substantial gains.

The key support continues to remain at 1.91-1.935.

Original post - 18th Feb 2020  

Posted here - 4th Mar 2020

[Natural Gas March Futures Update]

At a micro-level, NG kissed the lower range of the key resistance zone at 1.984-2.028 yesterday and seems to have completed wave(iii) that we have been following since last few days from 1.75-1.77 levels.

As long as the key support at 1.91 followed by the CRITICAL key support at 1.86 holds, a retest of the key resistance zone remains on the cards.

1.86, however, is the line in the sand for this wave pattern to maintain its validity.

Longs from last week around the 1.75-1.77 key support levels should plan to move stop losses below one of these support levels to lock their gains.

On the fundamental front, the latest short range ECMWF model has been neutral with no addition/loss of HDDs.

Natural gas in winter is best traded with small positions in a staggered manner with a tight stop loss near key levels and a "scale in" strategy to further build positions. This ensures good risk management under all circumstances.

 

 

Original post - 6th Feb 2020  

Posted here - 8th Feb 2020

[Natural Gas March Futures Update] 

Fundamentals

Short range [1-15 day outlook] is currently forecasting up to Feb 22nd. 

Long range [15-25 day outlook] is forecasting from Feb 23rd through Mar 4th & beyond.

The latest short range GFS lost 16 HDDs and ECMWF lost 3 HDDs. Both models have neutralized all the HDD gains from yesterday. 

In our note/article related to weather models, we had shared that GFS [US] model has a tendency to often over-exaggerate weather patterns and then correct them in the subsequent runs through a feedback loop. 

On the other hand, ECMWF [Euro] model is much more conservative and realistic in its approach. The last two runs are a fine example of why traders trust Euro simulation models more than GFS. Always remember this thumb rule while trading NG.

Now back to the weather pattern analysis. This has 3 components

1] Polar Vortex:- As you can observe from the status image shared with all members, the Polar vortex is clearly descending into the US. But it is not a simple descent. There is one block of PV that is descending into the west US, another large block of PV is still operating near Greenland and Canada and still making its mind on the descent. If this block descends into the NE US, it can bring a massive cold blast.

2] Alaska Ridge:- As you can see in the status image, the large warm ridge is still kissing the west of Alaska. It shall have to move to the east and station itself over the land mass of Alaska to form a good blocking pattern.

3] South East[SE] Warm Ridge:- A SE warm ridge is developing and if it were to expand into NE US, it could disrupt the progression of the cold blast into the NE US.

The only constant for a good part of this winter has been the weather roulette, unlike winters over the last many years. Most winters have seen weather patterns stay put for a good number of days before a slow progression to the next pattern and so on and so forth. This winter, the patterns have flip-flopped constantly and rapidly making it a weather roulette.

Important to note that the production has now dropped to ~92.5 bcf/day from the highs of ~96-97 bcf/day a few weeks back. If production levels continue to remain depressed, it will influence a deficit in the supply-demand balance in the medium-term. This was also covered in the note [Natural Gas] Longer term perspective which is an important read for positional traders in NG.

Technicals

1.823 is now a new layer of key support. Below 1.823, the critical key support is at 1.804-1.799 followed by 1.770-1.710

 

1.927 is now a critical key resistance, a sustained break of which can result in a smaller degree technical breakout on the micro-pattern targeting 2.000.

Zooming out, on the larger macro-pattern, 2.000 is a critical key resistance, a sustained break of which can result in a larger degree technical break-out on the macro-pattern targeting higher levels. This shall also confirm that a significant bottom is in place for NG.

Natural gas in winter is best traded with small positions in a staggered manner with a tight stop loss near key levels and a "scale in" strategy to further build positions. This ensures good risk management under all circumstances.

Original post - 31st Jan 2020  

Posted here - 8th Feb 2020

[Natural Gas March Futures Update] 

Fundamentals

"If there is no Alaskan ridge, there is no fridge" - a renowned weather meteorologist. 

The above quote sums up the "IF THEN" dilemma that most professional traders are currently in. The Alaskan warm ridge which is a pre-condition for the bullish blocking pattern is yet to form. There is, however, a large warm ridge to the west of Alaska. If this warm ridge moves east and firmly places itself over Alaska over the next few model runs, then there is a potential for "colder than normal" weather in mid/late February. Until this confirms, traders shall remain non-committal to any major adjustments in positioning.

Technicals

1.804-1.799 is now the critical key support followed by another critical support zone at 1.770-1.710.

All support levels on NG are now major/critical since they are all multi-year fibonacci levels and waves operating in their largest degrees [grand super cycle and super cycle]. This has been explained in the earlier note on Natural gas which provides a longer term perspective.

Natural gas in winter is best traded with small positions in a staggered manner with a tight stop loss near key levels and a "scale in" strategy to further build positions. This ensures good risk management under all circumstances

 

 

Original post - 27th Jan 2020

Posted here - 8th Feb 2020

 

[Natural Gas Weekend Weather Update] 

The weekend weather models have gained a good number of HDDs in light of the new cold blast that is descending into the US and also the North US warm ridge which is fading away as articulated in the previous update. 

The weekend models were NET BULLISH and should provide the price with a GAP UP at the open.

We shall share clear technical micro-patterns once the market opens and volumes pick up.

Original post - 24th Jan 2020  

Posted here - 8th Feb 2020

[Natural Gas February Futures Update]

Fundamentals

Short range [1-15 day outlook] is currently forecasting up to Feb 8th. 

Long range [15-25 day outlook] is forecasting from Feb 9th through Feb 18th & beyond.

Short range models are constantly fluctuating between + & - HDDs over the last few days on the back of the North US warm ridge slowly fading away. The fading away process can result in irregular intensity thereby causing frequent fluctuation in the HDDs. The latest short range model lost 5 HDDs.

Long range shows the cold blast descending into the US around Feb 12th [as shown in the image below]. The cold blast seems to also be doing a good job of displacing the North US warm ridge. All of this is pointing to a better outlook which should start reflecting slowly in the short range models in 5-6 days, provided there are no surprises.

 

There is still one GAP though.

There is NO Alaska warm ridge yet as depicted by the red circle in the image shared with all members. In simpler terms, Alaska is all BLUE. It needs to be RED. Alaska warm ridge is one of the pre-conditions for the cold blast to EXTEND its stay in the US. It does a good job of forming a blocking pattern for the cold air to remain in the US. 

That said, there still remains a possibility for this Alaska ridge to form and the next few model runs should guide us on any such possibilities. 

Technicals 

In our previous updates, we had highlighted the importance of the key resistance at 1.979 that needs to be surpassed to provide some early signs of a significant bottom. Natural Gas receded EXACTLY from this point yesterday failing to cross it in the first attempt.

While another attempt at 1.979 cannot be ruled out, it is also important to note that the failure to cross it has also exposed the critical key support zone at 1.804-1.885 followed by another critical support zone at 1.770-1.710.

All support levels on NG are now major/critical since they are all multi-year fibonacci levels and waves operating in their largest degrees [grand super cycle and super cycle]. This has been explained in the earlier note on Natural gas which provides a longer term perspective.

Natural gas in winter is best traded with small positions in a staggered manner with a tight stop loss near key levels and a "scale in" strategy to further build positions. This ensures good risk management under all circumstances.

Original post - 20th Jan 2020

Posted here - 8th Feb 2020

 

[Natural Gas February Futures Update]

Fundamentals

The North US warm ridge continues to maintain bearish pressure on NG prices with a continuous loss in HDDs. The 15 day outlook, however, shows some improvements in the weather model with the warm ridge getting surrounded by a NEW cold blast from the Arctic. We will share the comparison status images of weather models later today.

The latest short range model gained +1 HDD, earlier today.

The next weather runs along with the long range report to be released tomorrow should throw more light on the sustenance of the North US warm ridge and the potential descent of this new cold blast into the North East US region.

Important to note that heating demand spikes are NOT limited only to the early months in winter. In the last winter cycle too, after a significant spike in heating demand in November, the HDDs tempered significantly in December/Early-January followed by a late spike in heating demand again in Mid-January.

In-line with this heating demand, in the last winter cycle, prices first spiked from 3.2 to 4.92 in November and then with tempered heating demand in December/Early-January, prices dropped by $2 to 2.90 and then again precipitously rose to 3.6 levels closer to the end of January. Some times, heating demand can have late spikes even in February & as late as March even. It's all about how the combination of cold blast and warm ridges play out in and around the US

Technicals

NG approached the critical key support at 1.885 today during gap down open and breached it for a few seconds on account of a massive stop loss run or sweep of a large fund. 

There are rumors in the trading circles that Bill Perkins' [Houston based Hedge Fund Manager] Skylar Capital HF was forced into partial liquidation or margin call earlier today. We do not have any confirmation on this news and continue to treat it as a rumor until an official corroboration.

This led to a violent dip to 1.804 [Feb futures] that lasted only ~ 10 seconds followed by a whipsaw to recapture the 1.88 critical support level. In technical terminology, we call it a breach and not a sustained break.

On account of this brief breach, the critical key support levels have been adjusted to 1.804 -1.885 zone.

A key resistance has now formed at 1.979. Surpassing this resistance shall provide early signs that we may be close to a significant bottom until Spring. Price action shall then have to subsequently cross newer key resistances to confirm a bottom.

Original post - 20th Jan 2020  

Posted here - 8th Feb 2020

 

[Natural Gas Weekend Update] Weekend models have been net bearish with a loss of ~7 HDDs on account of the North US warm ridge as articulated in the updates last week.

We will share fresh updates & clear technical micro-patterns once markets open & volumes pick up. Please note that Monday is a US market holiday. Other markets are open.

Original post - 17th Jan 2020  

Posted here - 8th Feb 2020

[Natural Gas February Futures Update] 

Fundamentals

Short range [1-15 day outlook]  weather model had gained 4 HDDs in the earlier release today after gaining 6 HDDs yesterday. The latest model has not only lost all these gains but has ended up losing a total of 20 HDDs.

 

The short range weather outlook shows the Alaska warm ridge widening its presence to all of North US [as shown in the image shared with members] which is what is causing a major loss in HDDs. This has now pushed the cold blast to the southern US. We had mentioned in the previous updates that it is the North East US that accounts for significant heating demand and it is extremely critical for the cold blast to station itself in this region.

The weather patterns over the last few weeks have never really been able to provide a clear bullish extension. It's been a continuous see-saw in weather patterns. Every cold blast has been consistently challenged by a warm ridge.

 

First we had the South East warm ridge for several days and then it disappeared only for a short window and now a new North warm ridge appears to have formed. These continuous & sudden influx of warm ridges have resulted in a milder winter so far. 

The long range [15-25 day outlook], released a few mins back, shows the North US Warm Ridge fading away in the first week of Feb. We will, however, need to wait for the next couple of long range model runs to confirm this development.  

Technicals

NG prices completely depend on weather models and have reacted in-line with the see-sawing weather patterns, bouncing around in a very narrow 2.10-2.30 range for the last several weeks. Such narrow trading ranges are typically observed during summer and are rare in winter. 

The critical key support at 2.108 has been broken. Key resistance is now at 2.167.

Zooming out on the larger macro-pattern, the next CRITICAL key supports come in at 1.978 followed by 1.885.