Gas in the Tank

Trade View: Natural Gas (XNGUSD) — Buy

CMP: $3.5722
Stop Loss: $3.51
Target 1: $3.68
Target 2: $3.74
Duration: 3–5 sessions
Risk–Reward: ~1:2



Rationale

1. Price Structure — Trendline Respect

Natural Gas is respecting a rising trendline with a clear series of higher lows on the 15-min chart. These are not fluke bounces — they are coordinated pullbacks with rising volume toward the end, suggesting smart money accumulation. THe market respects levels when there’s underlying belief in the story, not just chart patterns. Here, price isn’t violating trendlines despite volatility.

2. Macro Tailwinds
• US heatwave in key regions like Texas and California is expected to increase demand for power generation GENERALLY a bullish driver for NG due to AC loads and cooling demand.
• Inventories have been tight with draws exceeding expectations in recent weeks (EIA data). Markets are slowly pricing in tighter forward supply.
• Geopolitics in Russia/Ukraine and LNG export updates continue to keep upside optionality alive.

3. Positioning & Sentiment
• Sentiment is still mixed, with many retail participants shorting around resistance. This creates the perfect fuel for a short squeeze if price pushes above $3.60 again.
• Commitment of Traders (CoT) data shows moderate long build-up from managed money, not extreme — indicating a measured rally, not frothy euphoria.


“If the story is good and the price structure is right, you don’t wait for perfection ,you size the trade sensibly and ride the wave." This is one such setup. We’re not trying to call the bottom we’re simply stepping in where the downside risk is limited, and the narrative has legs.