Updating Key Levels and Opportunities in Natural Gas UNG

Nov 25, 2014: 3:40 PM CST

I had a question about Natural Gas this morning and found something interesting on the current chart – note the key levels and breakout opportunities that are setting up currently.

Let’s see these levels and highlight the key targets and structure moving forward:

The indicator-heavy chart above shows the trend, spike in bullish (buy) volume going into November, and the two recent sideways trading ranges.

“Value” or a key pivot point (current support) exists near the $4.200 level as price is likely moving up through the yellow highlighted region toward the prior high near $4.700.

We can zoom-in on these specific levels and build short-term trades on the pure-price charts:

The chart above is the Natural Gas continuous futures contract (@NG) on the Daily frame with a Fibonacci Retracement grid as drawn.

Our key levels – at least from a Fibonacci perspective – include 4.067 and 4.443 (roughly 4.070 and 4.440).

I think the UNG (popular ETF) chart shows an even clearer perspective for key level/trade planning:

We see a slightly different Fibonacci Grid that overlaps both the trading range low at $21.00 per share and $23.50 per share.

The midpoint or short-term resistance exists near $22.20.  Use these three reference levels for playing “ping-pong” trades between these levels.

Otherwise, a clean breakout beyond $24.00 does suggest a trend reversal and bullish play back to the $26.00 prior high.

We’re in a neutral zone between $21.00 and $24.00 with a short-sale breakdown potential triggering under $21.00 (targeting $19.00 again).

Follow price between these levels and await a breakout from this sideways value area range (rectangle).

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Corey Rosenbloom, CMT
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1 Comment

One Response to “Updating Key Levels and Opportunities in Natural Gas UNG”

  1. Kulkarni Says:

    Understanding the key levels is vital and can be the game changer while I normally don’t prefer to trade in these but still knowing about it is great since it also affect currencies as well where I trade and currently I am having over 50 currency pairs to deal with all because of OctaFX broker, it has many more options like allowing us to start with just 5 USD and also providing outstanding customer service that is ready to help us in any situation.