Natural Gas Futures

Natural gas futures in the May contract are trading higher for the 2nd consecutive session up 4 points at 2.74 as I am now recommending to add 2 more mini contracts at this level then placing the stop loss on all 4 mini contracts at the 2.61 level as the chart structure is outstanding as natural gas prices are near a 4 week high.

The average price on all contracts is around 2.70 as the risk/reward are in your favor in my opinion as the volatility is extremely low as prices continue to crawl slowly on a daily basis as we are starting to experience cold weather once again in much of the United States helping push prices higher in the short term.

Natural gas prices are trading above their 20 day moving average, but still below their 100 day which stands at 2.79 which is just an eyelash away which is also acting as major resistance as the original recommendation was around the 2.66 level as this was a counter-trend trade as I thought prices became too cheap and the downside was limited.

Most commodity markets, in general, continue to rally on a weekly basis as the whole energy sector is bullish at this time as the stock market has bounced back significantly after experiencing some panic due to possible tariffs in steel and aluminum occurring with the possibility of a trade war brewing but it doesn’t look like that situation is going to happen so stay long and continue to place the proper stop loss while maintaining a 2% risk on any given trade as the proper money management technique.

TREND: —HIGHER–MIXED

CHART STRUCTURE: EXCELLENT

VOLATILITY—LOW