The natural gas flight has passed its first goal and is on its way to the second target.
In today’s edition, I will provide some updates on recent market developments for Natural Gas futures (NGF22) following my last projections published on Friday, Feb. 11, for which the stop was also updated on Wednesday.
Trade Plan
We all love it when a trade plan comes together! The market has to cope with stronger demand to fuel increasing industrial activity after being surprised by the warming mid-February weather forecast. Therefore, you can see that the rebounding floor (support) provided was ideal for the Henry Hub, which is also supported by unyielding global demand for U.S. Liquefied Natural Gas (OTC:LNGLF) to turn its momentum back up. The recommended objective of $4.442 was almost hit yesterday. However, it was achieved this morning (during the European session) and the $4.818 level is now the next goal.
As I explained in more detail in my last risk-management-related article to secure profits, my recommended stop, which was located just below the $3.629 level (below one-month previous swing low), was recently lifted up around the $3.886 level (around breakeven). Now, it could be lifted one more time, up to 4.180, which corresponds to the 50% distance between the initial entry and target 1. By doing so, the second half of the trade would become optimally managed. Alternatively, you can also use an Average True Range (ATR) multiple to determine a different level (above break-even) that may better suit your trading style.
Now, let’s zoom into the 4-hour chart to observe the recent price action all around the above-mentioned levels of our trade plan:
Henry Hub Natural Gas (NGH22) Futures (March contract, 4H chart)