Natural GasShort
Natural Gas (XNG/USD)
Overall Bias: Bearish with potential for a short-term bounce
Key Observations:
1. 1-Month Chart:
• Price Action: The long-term bearish trend is still intact. The price peaked at $9.177 and has since declined to the current level near $2.066.
• Support Levels: Major support is around $1.59. A break below could lead to a further drop.
• Resistance Levels: The resistance at $4.641 is a significant level that will likely cap any upside in the medium term.
• ATR (Volatility): With an ATR of 2.000, we can expect sharp price movements.
2. 1-Week Chart:
• Price Action: Natural Gas has broken below key support levels. The most recent candle shows price stabilizing near $2.066 after a significant drop.
• Support Levels: $1.60 is key weekly support.
• Resistance Levels: Significant resistance is around $4.641 (Fibonacci 0.236 level). The next resistance lies at $3.722 (Fibonacci 0.382).
• RSI: At 30.93, the RSI indicates that the market is near oversold territory, hinting at a potential bounce.
• MACD: Weekly MACD remains bearish, indicating downside momentum.
3. 1-Day Chart:
• Price Action: The price has tested a low of $1.591 and bounced back to $2.066. The price is currently trading below significant moving averages, showing weakness.
• Support Levels: Immediate support is $1.55. Below this level, there is not much support until $1.460.
• Resistance Levels: $2.639 (0.236 Fibonacci) is key resistance on the daily chart. Above this, $3.00 would be a psychological level.
• RSI: RSI at 39.41 is nearing oversold territory, indicating the possibility of a bounce.
• MACD: The daily MACD is bearish, though the histogram suggests the selling pressure might be easing.
4. 4-Hour Chart:
• Price Action: The 4-hour chart shows Natural Gas has formed a bottom near $1.55 and is now attempting to bounce. However, the price is still in a lower high/lower low structure.
• Support Levels: Immediate support is $1.555, which aligns with previous lows.
• Resistance Levels: The short-term target is $2.639, a key Fibonacci retracement level.
• RSI: At 48.60, the RSI is neutral, showing that Natural Gas has some room for upside before becoming overbought.
• MACD: The MACD has slightly turned bullish on the 4-hour chart, suggesting that there could be some short-term upward momentum.
5. 1-Hour Chart:
• Price Action: The price is currently consolidating between $2.066 and $1.555. The 1-hour chart is showing early signs of a potential bullish reversal.
• Support Levels: Strong support is at $1.555. If the price breaks below this, it could test the lows near $1.460.
• Resistance Levels: Immediate resistance is $2.27. A break above this level could lead to a retest of the $3.00 psychological level.
• RSI: The RSI at 57.09 is approaching neutral-to-overbought levels.
• MACD: The MACD is neutral but shows slight bullish divergence, supporting the case for a short-term bounce.
6. 30-Minute Chart:
• Price Action: The price is showing signs of bottoming in the short term and could head towards $2.27 (recent high) before retesting support.
• Support Levels: Immediate support is $1.555, while $1.863 could act as a mid-term support level.
• Resistance Levels: If the price can break above $2.27, a retest of $2.66 is likely.
• RSI: At 62.96, the RSI is nearing overbought conditions, which could suggest a minor pullback or consolidation before a further upward move.
• MACD: The MACD on the 30-minute chart has turned bullish, supporting short-term upward movement.
Trading Strategy:
Primary Bias: Bearish
• Short Position:
• Entry: Consider shorting near $2.27 (Fibonacci 0.764 level) if price shows resistance.
• Stop-Loss: Place a stop-loss above $2.66 (key resistance).
• Take-Profit Levels:
• First target: $1.863 (recent low support).
• Second target: $1.555 (strong support level).
Alternative Scenario: Short-term bounce
• Long Position (Speculative):
• Entry: If the price bounces from $2.066, consider a long position targeting the next resistance levels.
• Stop-Loss: Below $1.555 to limit downside risk.
• Take-Profit Levels:
• First target: $2.639 (0.236 Fibonacci).
• Second target: $3.00.
Risk Management:
• Position Sizing: Due to high volatility (ATR of 2.00), keep position sizes smaller than normal to manage risk.
• Stop-Loss: Ensure stop-losses are placed carefully, especially near support/resistance levels to avoid being stopped out by volatility.
Conclusion:
Natural Gas is currently trading near significant support levels, but the overall trend remains bearish. A short-term bounce could occur, especially if the price holds above $2.066, but the bearish momentum suggests the longer-term outlook remains to the downside. Any upside is likely to face resistance at $2.66 and $3.00. For now, shorting near resistance zones around $2.27 could be the favorable trade, while taking advantage of a potential bounce for short-term gains is also viable for more aggressive traders.
Key Observations:
1. 1-Month Chart:
• Price Action: The long-term bearish trend is still intact. The price peaked at $9.177 and has since declined to the current level near $2.066.
• Support Levels: Major support is around $1.59. A break below could lead to a further drop.
• Resistance Levels: The resistance at $4.641 is a significant level that will likely cap any upside in the medium term.
• ATR (Volatility): With an ATR of 2.000, we can expect sharp price movements.
2. 1-Week Chart:
• Price Action: Natural Gas has broken below key support levels. The most recent candle shows price stabilizing near $2.066 after a significant drop.
• Support Levels: $1.60 is key weekly support.
• Resistance Levels: Significant resistance is around $4.641 (Fibonacci 0.236 level). The next resistance lies at $3.722 (Fibonacci 0.382).
• RSI: At 30.93, the RSI indicates that the market is near oversold territory, hinting at a potential bounce.
• MACD: Weekly MACD remains bearish, indicating downside momentum.
3. 1-Day Chart:
• Price Action: The price has tested a low of $1.591 and bounced back to $2.066. The price is currently trading below significant moving averages, showing weakness.
• Support Levels: Immediate support is $1.55. Below this level, there is not much support until $1.460.
• Resistance Levels: $2.639 (0.236 Fibonacci) is key resistance on the daily chart. Above this, $3.00 would be a psychological level.
• RSI: RSI at 39.41 is nearing oversold territory, indicating the possibility of a bounce.
• MACD: The daily MACD is bearish, though the histogram suggests the selling pressure might be easing.
4. 4-Hour Chart:
• Price Action: The 4-hour chart shows Natural Gas has formed a bottom near $1.55 and is now attempting to bounce. However, the price is still in a lower high/lower low structure.
• Support Levels: Immediate support is $1.555, which aligns with previous lows.
• Resistance Levels: The short-term target is $2.639, a key Fibonacci retracement level.
• RSI: At 48.60, the RSI is neutral, showing that Natural Gas has some room for upside before becoming overbought.
• MACD: The MACD has slightly turned bullish on the 4-hour chart, suggesting that there could be some short-term upward momentum.
5. 1-Hour Chart:
• Price Action: The price is currently consolidating between $2.066 and $1.555. The 1-hour chart is showing early signs of a potential bullish reversal.
• Support Levels: Strong support is at $1.555. If the price breaks below this, it could test the lows near $1.460.
• Resistance Levels: Immediate resistance is $2.27. A break above this level could lead to a retest of the $3.00 psychological level.
• RSI: The RSI at 57.09 is approaching neutral-to-overbought levels.
• MACD: The MACD is neutral but shows slight bullish divergence, supporting the case for a short-term bounce.
6. 30-Minute Chart:
• Price Action: The price is showing signs of bottoming in the short term and could head towards $2.27 (recent high) before retesting support.
• Support Levels: Immediate support is $1.555, while $1.863 could act as a mid-term support level.
• Resistance Levels: If the price can break above $2.27, a retest of $2.66 is likely.
• RSI: At 62.96, the RSI is nearing overbought conditions, which could suggest a minor pullback or consolidation before a further upward move.
• MACD: The MACD on the 30-minute chart has turned bullish, supporting short-term upward movement.
Trading Strategy:
Primary Bias: Bearish
• Short Position:
• Entry: Consider shorting near $2.27 (Fibonacci 0.764 level) if price shows resistance.
• Stop-Loss: Place a stop-loss above $2.66 (key resistance).
• Take-Profit Levels:
• First target: $1.863 (recent low support).
• Second target: $1.555 (strong support level).
Alternative Scenario: Short-term bounce
• Long Position (Speculative):
• Entry: If the price bounces from $2.066, consider a long position targeting the next resistance levels.
• Stop-Loss: Below $1.555 to limit downside risk.
• Take-Profit Levels:
• First target: $2.639 (0.236 Fibonacci).
• Second target: $3.00.
Risk Management:
• Position Sizing: Due to high volatility (ATR of 2.00), keep position sizes smaller than normal to manage risk.
• Stop-Loss: Ensure stop-losses are placed carefully, especially near support/resistance levels to avoid being stopped out by volatility.
Conclusion:
Natural Gas is currently trading near significant support levels, but the overall trend remains bearish. A short-term bounce could occur, especially if the price holds above $2.066, but the bearish momentum suggests the longer-term outlook remains to the downside. Any upside is likely to face resistance at $2.66 and $3.00. For now, shorting near resistance zones around $2.27 could be the favorable trade, while taking advantage of a potential bounce for short-term gains is also viable for more aggressive traders.
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.