Crude Oil and Natural Gas Prices – What should be your strategy?

We have seen both Oil and Natural Gas prices holding a downside trend in the early session this morning.

Last week we saw natural gas prices gaining momentum and trading in range bound session on Friday. We saw an uptrend on MCX majorly due to fall in Indian Rupee. The prices were not able to break resistance in international market.

Traders had expectations of natural gas breaking resistance but with government report showing a bigger-than-expected storage
Natural Gas Prices
injection the previous week, the sellers are expected to dominate the market this week.

The price action clearly defines a huge presence of sellers based on record production and the return of average temperatures would shrink the current storage deficit before the start of the winter heating season.

Bearish traders are quite positive in this market and betting on drop in demand based on the weather forecast. Based on the current situations and weather conditions, I suspect natural gas prices to be bearish. We could see 195-183 in upcoming sessions.

For positional traders, I would advise to sell on high today and wait for next EIA report. One can continue to hold Short positions if report is negative for prices.
Short NG at 204 for target of 190 in upcoming sessions and SL of 208.

For Intraday traders, I would advise a short position at 203 for target of 201 and SL of 206.

I foresee Natural gas prices holding a downtrend till 190 but this would depend on movement of Indian Rupee and weather conditions in United States.

It is important for Traders to keep a close watch on Indian Rupee and this might affect prices on MCX and we might see a short rally.

Crude Oil

Last week we saw Crude Oil prices struggling around the globe. Crude at MCX did see some short term rallies majorly because of fall in India Rupee but we expect Crude to follow a downtrend this week.

The latest EIA report has been the worst since years and it does suggest trouble for Crude market ahead. There has been no positive news in the market for Crude and with increase in production, we expect Crude to follow bearish trend. The news about US and China meeting to discuss trade war should have had a positive impact but it is still not affecting prices too much.

We can expect a bounce back today so I would suggest sell on high.

Short Crude Oil Sep at 4570 with target of 4200 and SL of 4620.

Post a comment