Long

$NATURALGAS near strong resistance but not entirely exhausted

is entering in strong seller territory again and it's going to be tough to crack the resistance above where we have 200 ema on the weekly chart with a total volume of approximately 513K orders of which sellers beat buyers by 39%. Right above that we have another 721K orders where sellers dominate by 70%. But contrary to last time where we visited this area (30th Sep) things me be a bit more promising from a technical perspective.

On the weekly chart RSI and OBV are less overbought than the previous attempt and from the recent swing high (from previous week) they point upwards hinting at further momentum continuation with price sitting right above the 50 ema (weekly)with the 20 ema (weekly) about to crossover for yet another bullish sign. Lastly, we have price sitting above a support of 220K orders with buyers being 14% more than sellers (not a very strong support when considering the resistance right above us though).

On the daily chart we have price above 20, 50 and 200 ema with RSI and OBV increasing sharply and not yet overbought or indicating any divergence (so far) which is promising for further uptrend. Price is about to penetrate the supply zone at 2.98-3.12 with about 14% more buyers than sellers. A volume based support is visible at 2.86-2.81 with the demand zone being way lower near summer lows.

On the 4h chart RSI and OBV appear overbought, however no regular bearish divergence can be observed, indicating that the current trend strength remains unchanged (remember that markets can remain in overbought/oversold situations for an extended period of time - and a reversal is more likely to occur when they start becoming less and less overbought as price makes higher highs i.e regular bearish divergence). Recently we broke yet another resistance and price might return and retest this area near 2.99-2.91. A supply zone is visible at 3.12-3.19 hinting at the next possible resistance in the short term. Lastly, Elliot's 5wave model predicts that given the existing trend the next pivot point is near 3.37 before we see a substantial retracement at least on the 4h chart.

Finally on the 1h chart we start observing signs of trend weakness with price making higher highs but at the same time RSI and OBV being less and less overbought and a reversal candlestick pattern being formed. Also from the same 5wave model we are theoretically at a pivot point, with an expected retracement until 2.57! The demand zone is observed at 2.94-2.97 and might act as a support in the future for further uptrend continuation.

There are some problems with the above signs of weakness on the hourly though and the most important one is that all the divergences observed during last session occurred with suboptimal volume. This might be an attempt of manipulation of a fake breakdown or it can simply mean that people are simply collecting some of their earnings either as part of their usual risk management strategy or due to the fact that above (weekly chart) we face a very strong resistance from a technical perspective.

To sump up, it is clear that we are headed towards a strong resistance in fact we are already in it for some of the charts: 3.03-3.25 (w), 2.99 - 3.14 (d), 3.11-3.18 (4h), 3.10 - 3.19 (1h).
We have possible support based on volume at 2.59 (w), 2.86 (d), 2.97- 2.85 (4h) and 2.97-2.94 (1h).
Trend is still strong on the w, d and 4h chart with signs of weakness observed on the 1h chart. Since we made almost 14% in a single week, some retracement would be reasonable but then again the market maker has his own reasoning. Given that personally I do not see bearish divergence occurring at 4h or above, I am leaning towards the assumption that any pullback we might see in the next week is likely to find support within the volume depicted in the 4h and 1h charts.
Personally I will be looking to buy the dips near previous volumetric orderblocks if price action shows that they hold and price bounces up from there with bullish divergence.

Note

Looks like my worst case scenario occurred and on a single day! We are sitting near support from the neutral zone of 4h chart where most volume is accumulated and shared between buyers and sellers. The market is currently oversold at 15m and 1h while at 4h we have a bearish reversal signal and not yet oversold.
The coming days, either price will bounce up from the current support level with bullish divergence at 15m or 1h, or we will see a small pullback from todays swing low to lure buyers possibly reaching the previous broken support near 2.94-2.89 and then further downtrend continuation from there if it gets rejected.
So for a long entry I am closely monitoring the area between 2.81-2.69 in case buyers step in with volume and momentum and for a short entry I am watching 2.94-2.89 if price gets rejected with volume and momentum. Note that in both cases, we need big volume candles to confirm that the bounce or rejection are real and not some BS manipulation AND ideally this needs to occur with some kind of momentum (RSI, MACD etc) or cumulative volume (OBV) divergence at least at the 15m chart AFTER a squeeze. If none of the above conditions are met then I will simply study the chart and skip opening any trades.

Note

Ranging between 2.94 - 2.81, three days in a row tried to go past 2.81 and three times it bounced up, at the 4h chart we see large volume of buyers at the around the 2.81-2.85 area. Today RSI and OBV both indicated oversold at the 1h but not as deep as on Monday, indicating some bullish divergence and a possible return to the previous uptrend.
However, fundamentals for the time being are stale with demand being lower than supply and the market maker knows this.
It's not going to be easy to enter long at this point because the technical aspects are mixed.
For either a long or short entry I will consider the significance of the key level (volume) in confluence with volume/momentum and only treat them as a daily scalp because we are still stuck in a tight range without clear direction and breakout for something greater.

Note

Unfortunately, none of the previous volume orderblocks held and price is currently at 50 ema on the daily chart, if this also breaks then assuming we are still on an uptrend in the daily chart we are looking for a possible test of the 200 ema daily and a long entry there if it holds and the sellers appear to have exhausted volume and momentum. For the time being I am staying clear of any short/long entries until the fundamentals align with the technical analysis for a possible long entry. Any short/long entries currently are only valid as intraday scalp taking advantage of within day volatility and nothing else because although the technical outlook is bearish, the winter Nov-Dec is predicted to be quite cold and demand will soon ramp up.

Note

Strong rally today, breaking up the 200 ema for 15m, 1h and 4h after bouncing up from the neutral zone of the 1d chart around 2.65 level. On top of that we now observe hidden bullish divergence with rsi and obv for the daily chart which is a very strong bullish signal from purely a technical analysis perspective (price reached the same low but rsi and obv made higher low - hidden bullish divergence indicating possibly uptrend continuation).

I will monitor the dips during the next trading session and if the 200 emas hold for 15m, 1h and 4h then I will consider entering long for an intraday trade.

The fundamentals regarding energy production and consumption (including weather forecast) point at mild November for the time being so I am still not convinced to keep a long trade open for longer periods on top of that there's still some seller pressure - they might come and dump whatever rally we get, therefore for the time being any trades wether long or short I am not considering to keep them open for more than a day.

Note

We are near a strong buyers orderblock with price seemingly consolidating here. Today we had a retracement, however price also made a higher low at 1h and 4h charts with rsi and obv pointing upwards indicating the possibility of positive sentiment pushing higher from now. From a technical perspective we might be near an exhaustion of the sellers, however the mild weather forecast and bearish injection/production reports cause ambiguity for a long lasting position as of yet.

Note

I just opened a long position following my analysis so far. The technicals are well aligned for a bullish rally and the outcome of this US election has the potential to influence this even further.
I am keeping a trailing stop loss at the 15m chart. Specifically price was at a previous support which was retested and lasted multiple times, price pushed earlier near the 50 ema BB with a bullish engulfing candle (which acted here as a buy signal for me) and we have regular bullish divergence in this area which is visible from the weekly to the 15m chart indicating bullish momentum building.
Good luck everyone!

chriskokal1

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