NGAS sets up for potential “buy the dip” opportunity
FXCM's NGAS derives from prices set at Henry Hub for the North American natural gas market. However, it has sensitivities to the European natural gas market, which is under pressure due to Russian import restrictions. Moreover, Gazprom is planning a shutdown of gas flows to Europe between 31 August and 2 September. This halt is due to scheduled maintenance at a key station.
NGAS trades between the upper blue and red bands in its bullish channel. Moreover, the daily stochastic has pushed into its upper quintile (green rectangle), suggesting a robust underlying momentum. The longer the oscillator maintains this position, the greater the likelihood of further price gains on the daily timeframe.
The hourly chart has pulled back to support at the central pivot, P. A "buy the dip" opportunity may present if the daily momentum maintains its position. To this end, we need to see the hourly trend-following EMAs and stochastic cross bullishly. Moreover, the hourly stochastic will need to move above its 80 levels (blue arrow) and hold for a decent swing to chart. This action will suggest that the short-term traders have aligned with the longer-term trend.
Image by David Mark from Pixabay
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.