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.
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.