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Monday, August 13, 2018

Natural gas – a profitable trade for August 13, 2018



We saw an increase in the NG prices last week due to weather concerns and storage deficit expectations. While prices were gaining momentum, we saw a sideways trade with less movement last Friday after release of EIA report.

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On Thursday, the U.S. EIA reported that domestic supplies of natural-gas stockpiles rose by 46 billion cubic feet.

Looking at the weekly trade and strength in dollar index, we can see prices gaining momentum on MCX. 

Overall trend for NG is sideways since investors struggle between supply and demand. Currently, both supply and demand have been met, so we might not see upside trend for a long time.

Looking at the weak rupee prices and less movement we see prices hovering around same level moving 2 points up and down.

These markets are quite challenging from an Intraday standpoint or a positional trade. I would suggest investors to enter only if they are looking for a medium-term trade.

It is important to note that weather might not make much difference currently since production has increased and meeting the demand.

Natural Gas prices - Generatebucks.com

Also, one aspect to note is that most investors are not relying on the market as global markets have been quite volatile.

For trade for this week, an investor could enter creating short positions on high. Short NG on 206 with target of 201-199 by end of this week or early next week and SL of 208. 

Please keep in mind that prices in the global market are hovering around $3 - $3.10 but upside on MCX is due to falling Rupee.

For more info about prices last week, please refer to Natural Gas Markets.



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