Natural gas markets initially went sideways during the trading session on Thursday, but then broke down towards the $2.56 level. This is a market that should continue to be very volatile and negative, but I think a short-term bounce is likely. I think that the $2.75 level above will continue to be resistive, so I think any rally towards that area should be and I selling opportunity. The marketplace breaking down from here I think could go looking towards the $2.50 level underneath, which is a massive floor in the market. Given enough time, I think that we will find sellers entering this market, but I don’t think we can break down below that level. If we did, it would be a horrific turn of events for the buyers in this market place. I think if you are patient enough, you can sell rallies, and profit quite nicely as the overall trend is most certainly to the downside.
What I find particularly telling about this market is that we are selling off every time we rally during the coldest months of the year in the northeastern part of the United States. This is typically a very bullish time of year for natural gas, and the fact that we can hang on the gains during this time of year tells a very negative story. If you are patient enough, this could work out a lot like gold markets did in the 1980s: a nice selling opportunity every time it rallies and show signs of exhaustion. As far as buying from here, although I think we could bounce it’s unlikely to be the easiest trade to take.
NATGAS Video 22.12.17
This article was originally posted on FX Empire