Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.
Trading positions
- Natural Gas [NGZ21] Long around $3.604-3.716 support (yellow band) with targets at $4.009 & 4.355 and stop just below $3.424 – See chart section
- WTI Crude Oil [CLF22] No position currently justified on a risk-to-reward point of view.
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Trade plan explained
Since the market is currently facing further downward pressure due to warmer temperatures than expected, I evaluate the $3.604-3.716 level (yellow band) as a potential support where the price could find a rebounding floor, supported by unyielding global demand for US Liquefied Natural Gas (LNG). The recommended objective would be the $4.009 and 4.355 levels. My recommended stop would be located just below the $3.424 level (below half-yearly swing low). Alternatively, you could also eventually use an Average True Range (ATR) ratio to determine a different level that may better suit your risk profile.
Henry Hub Natural Gas (NGF22) Futures (January 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
