Natural gas markets went back and forth during the week, essentially forming a neutral candle. The $2.80 level above is resistance, but I think if we break above there we have a limited upside, perhaps the $3.00 level above. That’s an area where I would expect to see a lot more selling pressure, so I would be more than willing to short some type of exhaustive candle in that region. Alternately, if we break down below the bottom of the candle for the week, we could probably drop down to the $2.60 level.
Ultimately, if we can break down below that level, we could go to the $2.50 level, and then perhaps the $2.40 level after that. I believe that even if we break above the $2.80 level, longer-term traders are going to wait for selling opportunities. If you were to look at buying on that breakout, you need to be thinking more short-term than anything else. I believe it is only a matter of time before the sellers come back, based upon the oversupply of natural gas and of course the warmer temperatures in the United States. In general, this is a market that I think continues to offer plenty of selling opportunities, but you need to be patient enough to take advantage of them. This market has been difficult to deal with from a longer-term perspective, but short-term traders have loved this type of tight range that we have been in.
NATGAS Video 30.04.18
This article was originally posted on FX Empire