Natural Gas (NG/USD) Analysis - Harmonic Pattern at Key LevelsNatural Gas (NG/USD) is currently showing a Bullish Gartley harmonic pattern, with price hovering near a crucial resistance at 2.9000 USD. Fibonacci retracement levels highlight key zones for support and resistance.
The TDIGM indicator suggests overbought conditions, as the market has surged significantly over the past few sessions. This increases the possibility of a short-term correction or sideways movement before another bullish leg.
Investment Strategies:
1.Short-Term Sell (Reversal Strategy):
Rationale: The price has reached a critical harmonic point (D) and is showing signs of resistance near the 2.9000 USD level, with the TDIGM suggesting overbought conditions. This setup increases the likelihood of a corrective move.
Sell Entry: Around 2.8360 - 2.9000 USD after confirmation of price rejection at current levels.
Stop Loss: Above 3.0750 USD, in case of a bullish breakout beyond resistance.
Take Profit: First target at 2.7000 USD (0.236 Fibonacci retracement); Second target at 2.5781 USD (0.382 Fibonacci retracement).
Risk/Reward Ratio: This strategy offers low risk/reward ratio, despite the potential for a profitable correction in the short term.
2.Medium-Term Buy on Pullback:
Rationale: The price action suggests a longer-term bullish trend, despite the potential short-term correction. Entering after a pullback to key support levels provides a safer entry point for medium-term buyers.
Buy Entry: Around 2.5000 - 2.4787 USD, which corresponds to the 0.5 Fibonacci retracement level, offering a good entry after the expected correction.
Stop Loss: Below 2.3600 USD
Take Profit: First target at 2.8360 USD, retesting previous highs;
Second target at 3.0750 USD, following the next leg higher.
Risk/Reward Ratio: A well-timed pullback entry offers a low-risk, high-reward trade with the potential to capture the next wave up in the bullish trend.
3.Breakout Buy Strategy (Bullish Continuation)
Rationale: If the price breaks above the 3.0750 USD resistance level, it indicates a strong continuation of the bullish trend, opening up more upside potential.
Buy Entry: After a confirmed breakout and close above 3.0750 USD, which could trigger further upward momentum.
Risk/Reward Ratio: The breakout strategy can offers a strong potential reward if the price breaches the key resistance, leading to higher highs.
The Natural Gas market is approaching a pivotal point, with Point D of the harmonic pattern acting as a potential reversal zone. The short-term sell strategy offers a high-probability trade based on the current overbought conditions and harmonic setup, while the buy-on-pullback strategy provides a safer entry for longer-term bulls. If the price breaks out above the 3.0750 USD resistance, a continuation of the bullish trend is likely, offering further upside potential.
As always, monitor the price action closely, especially on lower timeframes for additional confirmation.
