Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.
Trading positions
- Crude Oil [CLZ21] Long around $76.03-77.23 support (yellow rectangle) – with stop below $74.67 and targets at $79.39 and $81.08 – See Friday’s edition
- Natural Gas [NGZ21] Long around $5.268-5.361 support (yellow rectangle) – with stop below $5.070 and targets at $5.750 and 5.890 – See Figure 1
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Trade Analysis
Natural gas futures extended their decline on Monday as weather-driven demand expectations continued to dwindle over the weekend.
Therefore, our entry recommendation provided last week just got triggered in the early session, with a daily candle now forming the shape of a doji (when the open and close of the candle are at similar levels, thus representing a bodiless candle), which may signify the end of that current pullback (just within the $5.268-5.361 support band given).
The stop level is quite tight, just below the previous swing low at $5.070 or – if that’s more convenient for you – calculated using an Average True Range (ATR) ratio. This is to maintain a profitable risk/reward ratio.
Figure 1 – Henry Hub Natural Gas Futures (NGZ21) Futures (December contract, daily chart)
Happy trading!
As always, we’ll keep you, our subscribers, well-informed.
Thank you.
Sebastien Bischeri
Oil & Gas Trading Strategist
