Natural Gas Short: Testing the $4 Barrier – Opportunity Knocks!
Natural Gas (XNG/USD) has spiked to revisit the $4 price zone, activating my short trade. This marks the second time in two years that the price has reached this significant resistance area. The $4 level is pivotal, serving as a key psychological barrier and a historic zone of strong price action. With the position now live, I am leveraging the resistance for a retracement opportunity.
Fundamentals:
• Weather and Seasonal Demand: Short-term spikes in demand are driven by cold weather in the U.S., but with futures traders starting to focus on spring, we may see waning bullish momentum in the coming weeks.
• Russian Gas Supply Constraints: Limited Russian gas flows to the EU continue to add uncertainty to the market, but the current rally seems to be pricing in short-term factors rather than long-term structural changes.
• Historical Levels: The $4 spot price has attracted significant attention as a resistance zone, with $3.40 acting as a key support in recent months. The bounce from this level earlier this year highlights its importance.
• Market Behavior: Futures traders’ sentiment and seasonality are critical drivers. As winter progresses, reduced speculative demand may favor a bearish pullback.
Technicals:
• Entry: $4.00 (Resistance Zone)
• Target: $2.60 - 2.70
• Partials: From $3,19
• Stop Loss: $4.40 (Above Recent Highs)
• Timeframe: 12H
This short trade aligns with technical, fundamental, and seasonal narratives. As the price has shown rejection at this zone, I will actively monitor for a breakdown toward the $3.40 level while managing risk prudently. Stay disciplined, follow your trading plan, and remember to pay yourself as the market unfolds.
Note: Please remember to adjust this trade idea according to your individual trading conditions, including position size, broker-specific price variations, and any relevant external factors. Every trader’s situation is unique, so it’s crucial to tailor your approach to your own risk tolerance and market environment.
Fundamentals:
• Weather and Seasonal Demand: Short-term spikes in demand are driven by cold weather in the U.S., but with futures traders starting to focus on spring, we may see waning bullish momentum in the coming weeks.
• Russian Gas Supply Constraints: Limited Russian gas flows to the EU continue to add uncertainty to the market, but the current rally seems to be pricing in short-term factors rather than long-term structural changes.
• Historical Levels: The $4 spot price has attracted significant attention as a resistance zone, with $3.40 acting as a key support in recent months. The bounce from this level earlier this year highlights its importance.
• Market Behavior: Futures traders’ sentiment and seasonality are critical drivers. As winter progresses, reduced speculative demand may favor a bearish pullback.
Technicals:
• Entry: $4.00 (Resistance Zone)
• Target: $2.60 - 2.70
• Partials: From $3,19
• Stop Loss: $4.40 (Above Recent Highs)
• Timeframe: 12H
This short trade aligns with technical, fundamental, and seasonal narratives. As the price has shown rejection at this zone, I will actively monitor for a breakdown toward the $3.40 level while managing risk prudently. Stay disciplined, follow your trading plan, and remember to pay yourself as the market unfolds.
Note: Please remember to adjust this trade idea according to your individual trading conditions, including position size, broker-specific price variations, and any relevant external factors. Every trader’s situation is unique, so it’s crucial to tailor your approach to your own risk tolerance and market environment.
Note
The position is now halfway in profit, and I’ll be closely monitoring the Sunday opening price. Historically, this instrument tends to open with a significant gap. Regardless of the outcome, I plan to secure 70% of the profits at this level.
Wishing everyone a fantastic start to the week—remember to manage your risk and pay yourself!
Trade active
The current position remains in profit, but the price has retraced close to our entry point. At this stage, it’s crucial to observe how the price action develops. This is a key area to reassess risk management strategies, ensuring we stay aligned with the broader market direction.
Stay patient, monitor closely, and remember to pay yourself when the opportunity arises.
Note
The position currently stands at a strong 13.5% profit, with price action failing to break above the 3.900 resistance level. Sellers have stepped in, driving the price down to 3.600. While the bullish trend remains intact for now, a break below 3.400 could shift the narrative in favor of my short position.
Key levels to watch as the market unfolds—stay disciplined and prepared for potential trend shifts. Let’s see how this plays out!
Note
The position has reached the Point of Control (POC), signaling a potential area where buyers might step in to cover the gap from Sunday’s open. Currently, the position is sitting at an impressive 20.50% profit, steadily advancing toward the 33% target.
For now, no intervention is needed. The price has taken its time retesting the highs but ultimately failed, confirming a clear path to the lower $3-$2.9 range. At these levels, I’ll assess and act accordingly.
Stay patient, stay informed, and let the trade unfold.
Note
The price has dropped to 2.99, marking a solid 25% gain. I’ve acted accordingly by securing more profits and moving the SL to the 3.8 price area, locking in gains while giving the trade some room to breathe.
Currently, I’m leaving 10% of the initial position open to ride any further downside potential. The price is now testing the 0.5 Fib level, a critical zone where I’ll manage the trade based on price behavior.
Pay yourself and enjoy the start of the trading week!
Trade closed manually
The trade was manually closed at 3.006 after a significant drop. While the setup had potential for further downside, I wasn’t convinced of continued momentum, and holding it for 32 days meant accumulating more swap fees. Given these factors, I chose to secure profits and exit fully.
A well-executed trade with strong risk management—time to pay myself and move on!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.