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Natural Gas (Henry Hub)

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NGAS trade ideas

Natural Gas: Dirt Cheap!Hello friends. Natural gas is dirt cheap! The price has fallen from the highs by an incredible 70% as the market came to realize that there was no winter crisis coming and was forced to unwind the overly crowded long trade. If you remember, people were expecting there would be a massive shortage of natural gas during the winter, and the herd was positioned long to take advantage of this. Since the herd is usually wrong, and since natural gas was objectively way too expensive, we had shorted it near the highs and made some money on the way down. Now things have changed again, and we will re-evaluate our positioning and share the reasoning behind our trade. Here we can see natural gas priced against crude oil, an incredible pair due to the fact that it has worked 100% of the time to predict that the pair will move from supply to demand and back again over and over with the one exception of the time when crude oil briefly went negative due to extreme circumstances during Covid. This chart tells us two things: Crude oil is expensive (relative to natural gas) and will likely fall in price Natural gas is cheap (relative to crude oil) and will likely rise in price Now, we are not taking a pair trade and completing it with a short crude oil leg for several reasons. (We are only long nat gas, with no short side on crude oil). The main reason is that we are overall bullish on commodities, and we have a good basis for this idea. We think commodities overall will rise substantially over the course of the next several months. Take a look at our chart of commodity prices which features crude oil, wheat, lumber, gold, and lean hogs. Something from each big sector to show us the live prices and general trends of commodity markets. It has fallen dramatically by almost 50%, despite many grand claims of inflation by people who are using lagging indicators and/or who are just clueless altogether. Our chart essentially shows the live inflation rate, which is widely ignored. If we were to use this index to measure inflation, we would find that the actual inflation rate during 2022 was about -25%. Extreme deflation, as we predicted long ago, and made a profit from. The fed will see this at some point, and they will realize that since they have completely obliterated commodity prices by slashing them in half it's time to stop deleting dollars + hiking rates, and start considering a pivot. There is no need to crush commodities even further, since the real goal is price stability, and deflation is considered to be far worse than inflation by economists. (We don't totally agree, but that's what they think, and the Fed will want to avoid deflation at all costs). Price controls supply and demand, which makes commodities perhaps the most mean-reverting asset out of everything. Production will be reduced because of lower prices, and consumption will rise. The ultimate effect is price bouncing. Another key point, China has reopened. This is a massive bullish signal for the commodity markets because they consume such a massive amount of commodities in the process of being the global center for almost all manufacturing (most things are made in China). As a result of this, China consumes more energy than anywhere else on the planet. This means China's opening up will increase demand for commodities broadly and should push prices higher. The thesis is supported by past evidence, and we can see that commodity prices often follow the MCHI China ETF. Considering the China ETF has rallied over 50%, commodities should follow later. Trading plan We will go long on the US Natural Gas futures market with a settlement date of 3/29/23. The trade has an entry price of $2.90, a stop loss of $2.50, and a take profit of $3.50. Note that the price is slightly different on this futures contract compared to the spot price. (This is a normal occurrence in futures markets). The trade has been given a decently high size because we think it has a substantial edge and we like to size trades according to the edge we believe they have. We are relatively good at estimating how likely a trade is to win. Thanks for playing.
PEPPERSTONE:NATGASLong
by bowtrix
6
NATGAS chart overviewThe price of natural gas fell to a one-and-a-half-year low of $3.20 on Friday. The last time we were at that place was in June 2021. During the Asian trading session, the gas price formed a bottom at that point and began slightly recovering to $3.37, the current level. We need a positive consolidation and a break above the $3.40 level for a bullish option. Then it is necessary to maintain up there so that with a new bullish impulse, we can start the continuation of the resistance of the price. Potential higher targets are the $3.60 and $3.80 levels. For a bearish option, we need a negative consolidation and a new test of support at the $3.20 level. A break below would increase bearish pressure, which could see the price decline and test the $3.00 support level.
OANDA:NATGASUSD
by Financebroker
Natural Gas: Long-term viewGreetings! Was keeping an eye on NATGAS and I saw the price forming an ending structure inside a channel. The price is in a big downtrend for a while now, but I am expecting the price to give us some green signs soon. We may drop a bit more towards an important Daily demand area which will also act as a stop hunt move from the big boys. In this regard, I will be focusing on the buys instead of sells. I am expecting the price to reach that area and then reverse. If we start going up and we get a breakout followed by a pullback, I am anticipating a high chance of moving up, at least for a correction in the bigger scale. My first area to watch if we start going up is the first 4H supply zone highlighted on the chart. Trade safe.
OANDA:NATGASUSDLong
by AlexAnastasescu
XNGUSD ready to reverse recent downtrend LONGXNGUSD has been on a long downtrend. On the 1 H Chart, a falling wedge is seen awaiting a breakout. Moving Average slopes are decreasing their negativity towards zero. ATR / Volatility is decreasing as is the downtrend momentum on the average directional index indicator. I see this as a long swing trade setting up for forex or alternatively a natural gas ETF like UNL / UNG or a natural gas stock like LNG. This trade would be propelled by the dollar losing strength, inflation being sustained, WW III in Europe continuing and the weather turning cooler the remainder of the winter.
FXOPEN:XNGUSDLong
by AwesomeAvani
3
Long Natural Gas based on temperature decrease in USFundamental: 15.01.23 Weather reports point to the possibility of a further drop in gas prices amid forecasts indicating the likelihood of unusually mild temperatures in the United States through mid-January, Gelber's note said. 16.01.23 After consecutive weekly declines at the start of the new year, natural gas futures rebounded on Tuesday amid expectations of more cold spells later this month. The spot price fell about 27.6 cents on Friday after several days of unusually warm weather to start 2023. Production also proved strong and stood at around 101 billion cubic feet per day. It remained near record levels of around 102 billion cubic feet per day. However, natural gas prices are more than 50% lower than they were just a month ago, and for futures contracts to maintain an upward trajectory, cold air needs to arrive soon and other February predictions may need to be made. The U.S. National Oceanic and Atmospheric Administration's eight-to-14-day forecast calls for below-average temperatures in the western, midwestern and southwestern parts of the lower 48 states. 18.01.23 US gas prices are rising today (knowing that volumes are limited due to MLK Day), while European prices are falling sharply. There are new weather forecasts for the last week of January in the United States. Temperatures are expected to drop significantly across most of the United States, to below average levels. It turns out that February could bring more volatility for natural gas. Seasonality indicates two local troughs (cold winds) - January 21 and February 4. "Looking ahead, it's not out of the question that NYMEX gas futures will return to $5 mmBtu or higher, but it will take a lot of arctic air to dominate the nation for several weeks," adds Gelber's note. "Conversely, if the weather forecast models revert to a longer spell of warmth, this would set the stage for new lows for NYMEX gas futures." Technical: - RSI over 30.0 + Standard deviation increasing (high volatility) - High volume at $3.54 - Support reached
CAPITALCOM:NATURALGASLong
by thefrenchsniper
1