The Natural gas flight just landed after hitting its second and last target yesterday. The perfect trade does not exist, but this one has been developing pretty well.
In today’s edition, I will provide a trade review for Natural Gas futures (NGH22) following my last projections published on Friday, Feb.-11, for which the stop was also updated last Wednesday and trailed again last Thursday.
Trade Plan
Just to remember, our initial plan was relying on a gas market having to cope with stronger demand to fuel and increasing industrial activity after being surprised by the warming mid-February weather forecast. Hence, the projected rebounding floor (or support level) provided, which was ideal for the Henry Hub given the unyielding global demand for U.S. Liquefied Natural Gas (LNG), providing a catapulting upward momentum. Then, it took a few days for the first suggested objective at $4.442 to be passed, and a few extra days for the second target located at the $4.818 level to be hit (as it was yesterday). Meanwhile, as I explained in more detail in my last risk-management-related article to secure profits, an initial stop was placed just below the $3.629 level (below one-month previous swing low), before manually trailing it up around the $3.886 level (around break-even), then one more time up towards 4.180 (which corresponds to the 50% distance between initial entry and target 1), and finally to be lifted up to 4.368 optimally.
Consequently, after a reconnaissance mission got close enough to target number 2, the Nat-Gas flight started running out of kerosene after passing through the first target like a fighter jet would break the sound barrier. Therefore, after getting refuelled at a lower altitude (just above our highest elevation trailing stop) by a refuelling aircraft, the jet was finally ready to point and lock its last target before striking it.
Here is a picture-by-picture record of that trade.
First step: flight preparation on carrier ship:
Henry Hub Natural Gas (NGH22) Futures (March contract, daily chart)
Second step: Prices catapulted and stop lifted at break-even once the mid-point target was reached:
Henry Hub Natural Gas (NGH22) Futures (March contract, daily chart)
Third step: target one hit and stop dragged up:
Henry Hub Natural Gas (NGH22) Futures (March contract, daily chart)
Zoom to target one (4H chart):
Henry Hub Natural Gas (NGH22) Futures (March contract, 4H chart)
Fourth step: mission reconnaissance to target two and refuelling aircraft en route to refill the jet tank (stop trailing again):
Henry Hub Natural Gas (NGH22) Futures (March contract, daily chart)
Zoom to lock final target (4H chart):
Henry Hub Natural Gas (NGH22) Futures (March contract, 4H chart)
Fifth step: Final strike to target two:
Henry Hub Natural Gas (NGH22) Futures (March contract, daily chart)
Now, let’s zoom one more time into the 4H chart to observe the recent price action all around the above-mentioned steps of our flying map:
Henry Hub Natural Gas (NGH22) Futures (March contract, 4H chart)
As you may observe, target one is now serving as a new landing space (support) for a new ranging market cycle.