Cold snap is expected in the US
In the US, cold snap is forecasted at end of October 2017. Will there be an increase in the prices of natural gas, which is widely used for heating?
On the daily timeframe, NATGAS: D1 overcame the resistance line of a downtrend and resumed the uptrend. It also exceeded the 200-day moving average line. The further price increase is possible in case of cold weather in the US and an increase in exports.
- The Parabolic indicator gives a bullish signal.
- The Bollinger bands have narrowed markedly, which indicates low volatility. They are titled upwards.
- The RSI Indicator is above 50. No divergence.
- The MACD Indicator gives a bullish signal.
The bullish momentum may develop in case NATGAS exceeds its last high and the upper Bollinger band at 3,111. This level may serve as an entry point. The initial stop loss may be placed below the last fractal low and the Parabolic signal at 2,9. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level at 2,9 without reaching the order at 3,111, we recommend cancelling the position: the market sustains internal changes that were not taken into account.
Summary of technical analysis:
| Position | Buy |
| Buy stop | Above 3,111 |
| Stop loss | Below 2,9 |