Facts:
- The NOAA weather forecast indicates an upcoming cooling trend over the next 8-14 days, particularly in the “Mid-west” area.
- RSI(14) has dropped to the level of 39.
- The EMA100 average crossed the EMA200 average in November and maintains a pro-growth structure.
- EIA indicates a decrease in gas production.
Trade: Long Position (LONG) on NATGAS at market price
- Target: 4.15
- Stop: 2.5
NATGAS (D1)
Source: xStation5
OPINION: The decline in NATGAS since the beginning of December has exceeded the rational range of correction, and currently, the market does not account for the upcoming support for valuations due to increased supply. Weather forecasts clearly indicate cooling in key regions of the USA, along with a decrease in production. The number of expected heating days has also risen significantly above average, yet valuations remain in a downward channel. The scenario of a corrective increase is also supported by technical analysis. The RSI(14) indicator has dropped to 39, indicating significant oversold conditions, while the EMA100 and EMA200 averages maintain a growth structure after crossing in November 2025.
Methodology and assumptions:
- The recommendation is based on technical analysis of the chart, particularly EMA averages, RSI, Fibonacci levels, and fundamental analysis of the natural gas market.
- The target level was determined based on the dynamics and range of previous corrective movements and FIBO levels.
- The defensive stop loss order was determined based on a favorable risk-to-reward ratio.
