/NG (natural gas futures) will offer an objective short entry on a break below this bearish rising wedge pattern as nat gas has rallied into the 2.9ish resistance level with negative divergence between prices & the momentum indicators. The 60-minute chart below lists several potential price targets with my preferred target at this time just above the 2.782 support level, assuming a sell signal is triggered soon.
NG 60m Nov 5th
Other proxies for a quick pullback trade on nat gas would be /QG, the E-mini Natural Gas Futures contract which employs a smaller (1/4th) leverage factor than /NG at 2,500 million British thermal units (mmBtu) vs. 10,000 mmBtu per contract as well as DGAZ (3x Inverse Natural Gas ETN). DGAZ has traded as low as 85.36 so far in today’s pre-market session & will offer an objective entry if/when /NG breaks below the 60-minute wedge today.
DGAZ 60m Nov 4th close
DGAZ will be the official proxy for this potential trade setup & I will post an update via a new home page post if/when it appears that we have a convincing breakdown in /NG as that will send an email notification to all members (unless you have unsubscribed or are not receiving email notifications of new home page posts).
The sole price target for DGAZ at this time is 106.05 with the potential for additional targets to be added, depending on how the charts develop going forward. The suggested stop for this trade (subject to revision based on the entry price) is any move below 84.76. In order to account for the 300% leverage as well as the above-average volatility of nat gas, the suggested beta-adjusted position size for this trade is 0.30.