Natural Gas – Price Action Outlook before OPEC Meeting

It’s been a while, since I took any trades on commodities. Stocks are very volatile from last couple of weeks, hence this time I chose to focus on Commodities, specifically on Energies. Why Energies? Well as per my experience, Energies are cyclical and tends to have more demand in certain time period such as summer and year end. Because of these seasonal tendencies there will be good movements in Price Action.

Initially I thought of focusing on Crude Oil, but there was no proper trading setup on preferable time frames. Hence I decided to look at Natural Gas – Here’s the Price Action Analysis of Natural Gas on 1D chart.

Natural Gas Price Action Analysis on 1D Chart

Take a look at the Price Action of International Natural Gas on 1D chart. Before heading into the content, here’s a quick suggestion on Commodity charts – It’s better to focus or analyse the International commodity charts compared to MCX charts because of the accurate representation in Price Movements. Even if you’re an MCX trader, it’s prudent to analyse the International Natural Gas price chart and then take trades in MCX market.

Since from Nov 5th, we can witness the Downtrend in Natural Gas. The trend persisted for almost a month and it’s a short-term trend. Also bear in mind, the Downtrend is still intact and not yet reversed.

Within the Downtrend there was Multiple Trend Trading Patterns and Opportunities such as CPB, Inside Congestion etc. I have marked few of them in the Price Chart; I did mention some of these setups on my premium webinars over last weekend. A good trend trader would’ve made decent gains by trading these setups in the trend.

Just a few days back, precisely around the End of November, there was a sharp selling climax. I have pointed out the pattern on the price chart, kindly have a look. Numerous times I have discussed about the importance of Climax formations in previous contents. In a nutshell, Selling climax indicates that sellers are exhausted and the market is oversold.

Remember, just because the market is oversold, doesn’t mean the trend has to reverse! There are other possibilities such as trend unfolding into a range or continuing into the existing trend etc.

As of now, NG prices are bouncing back after the selling climax. There are two scenarios we can expect going forward from here – Either the bounce back will turn into a CPB setup and leads to trend continuation or It could fail and reverse the trend altogether. Traders should watch the Price Action in upcoming days and take decisions accordingly. Also beware of the OPEC meeting, which can change the Market sentiment.