The natural gas markets had a very volatile week, as we bounced between the $2.85 level on the bottom and reached above the $3.00 level on the top. Ultimately, the market ended up forming a bit of a neutral candle. This being the case, it seems very likely that the market should continue to break down though, because the $3.00 level is massively resistive. I believe that the overall attitude of the market will be negative, and with this being the case it’s likely that the market will continue to pay attention to the oversupply of natural gas, and therefore I believe that rallies will continue to be selling opportunities. Ultimately, the market could go much lower, but I would also anticipate a significant amount of volatility as the markets aren’t necessarily known for stability.
Selling rallies
I believe that it’s only a matter of time before rallies get sold off, and I think that we will target the $2.75 level underneath, and then eventually the $2.50 level after that. The market breaking down to that level would be a head and shoulders being broken to the downside, and could send this market much, much lower. This would be catastrophic for the market, and I believe that sellers will jump into this market hand over fist based upon that level. Anytime we rally, I suspect that people will be looking at that as an opportunity to jump back into this market, and therefore it’s likely that the market will find that the sellers are very much in control as the natural gas quantities coming out of the United States continues to go even higher, and more than likely will continue to be an anchor around the neck of the market.
NATGAS Video 10.7.17
This article was originally posted on FX Empire