Subscription: Crude Oil & Nat Gas
NG is approaching a solid Demand Zone.
I marked up with Green Arrows numerous wicks, candles showing spike down that was eventually bought out.
We can see that Demand Zone starts from 2.161. At that level we can see several major reversals happened in the past.
That is so called landscape analysis. Its a supplemental tool to add confidence in reversal trades.
Now lets come back to our main tool, wave analysis.
The bullish thesis is explained by the fact that we had a completed impulsive rally started at 2.061 in early August and topped at 2.715 in mid September.
What has followed that impulsive rally was ( a ) – ( b ) – ( c ) down corrective structure.
NG - 120 min chart updated at 9-48 PM on 10-10-2019
What is important in that corrective (a)-(b)-(c) down structure that the final subwave ( c ) down always comes as a strong impulsive move structured as five micro waves down.
If you look at 120 min chart above you can see that NG is in the final micro wave v of the final subwave ( c ) down.
Now we need to apply two main forecasting tools to find potential high probability reversal zones.
1. We apply retracement ratios to taht Five Wave up rally from early August to mid September 2019.
You can see that the last bounce started at 76.4% retracement.
Now price is approaching 85.4% retracement, another very strong fib level.
2. We check ratio between subwave ( c ) and ( a ) down.
The previous bounce started when price slightly overshot 176.4% extension.
The next very important extension is 223.6% = 2.133
However, 85.4% retracement is located higher at 2.161
223.6% extension is a super strong level.
But 85.4% retracement is also strong and this is where several previous reversals took place.
That area in between of 2.161 and 2.133 is our next Demand Zone.
And a gap down into that zone would be a solid long setup.
.
Important Disclaimer
CastAway Trader LLC, the publisher of this web-site and videos is not registered as an investment adviser nor a broker/dealer with either the U. S. Securities & Exchange Commission or any state securities regulatory authority. Users of the website www.castawaytrader.com and viewers of the videos are advised that all information presented on the website is solely for informational purposes, is not intended to be used as a personalized investment recommendation, and is not attuned to any specific portfolio or to any user’s particular investment needs or objectives.
Trading stocks, options, or futures carries a high level of risk, and may not be suitable for all investors. Before deciding to trade, you should carefully consider your objectives, financial situation, needs and level of experience. CastAway Trader LLC provides general overview of trading methods that does not take into account your objectives, financial situation or needs. The content of this website must not be construed as personal advice. All trading setups and/or trades presented in the web site and/or trading chat room by CastAway Trader an/or by other members of the chat should be considered hypothetical for educational purposes only and should not be expected to be replicated in a live trading account.
An investor could potentially lose all or more than the initial investment. You should not speculate with capital that you cannot afford to lose. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style.
You should be aware of all the risks associated with trading. You should seek advice from an independent financial advisor.
Any information posted on this web site is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All users of the website must determine for themselves what specific investments to make or not make and are urged to consult with their own independent financial advisors with respect to any investment decision. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. All opinions, analyses and information posted on the website are based on sources believed to be reliable and written in good faith, but should be independently verified, and no representation or warranty of any kind, express or implied, is made, including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, CastAwayTrader LLC and its officers and employees undertake no responsibility to notify such opinions, analyses or information or to keep such opinions, analyses or information current. Also be aware that the owners, officers and employees of the web site www.castawaytrader.com may have long or short positions in securities that may be discussed on the website, Premium Trading Chat room and/or in the videos posted by CastAway Trader LLC.
Past results are not indicative of future profits.