The natural gas markets continue to be very noisy in general, with this past week seen quite a bit of selling pressure down to the $2.60 level. We turned around to form a nice-looking hammer, and the hammer of course is a bullish sign. The $2.80 level above is resistance, and if we can break above there, the market will then go to the $3.00 level. If we can break above the $3.00 level, that would be a very bullish sign, but I don’t think that’s going to happen anytime soon as we have a major oversupply of the commodity.
I’m looking for some type of exhaustive candle after a rally to start selling, and the biggest problem that you may run into is that with the tight ranges that we find ourselves in, it might be difficult to base a trade on the longer-term charts. If we can reach towards the $3.00 level, I would be more than willing to start shorting this market as it would be an ideal place to see sellers come in. If we can break down below the $2.50 level, that would send this market much lower, perhaps down to the $2.25 level initially, and perhaps even lower than that. I have no interest in buying this market, it simply is far too negative and oversupplied to give us buying opportunities anytime soon as the fundamental situation is far too dire.
NATGAS Video 16.04.18
This article was originally posted on FX Empire
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