Natural gas markets broke down significantly during the trading session again on Thursday, reaching towards the $2.70 level as it is a large come around, psychologically significant number, and it is of course an area that we have seen support at previously. I think that the market will continue to find sellers on rallies, so I think a bounce from here could be a nice opportunity to start shorting again. If we break down below the $2.70 level, it’s likely that we will continue to go lower, perhaps down to the $2.65 level, and then eventually the $2.60 level which is even more support. In fact, I see that as the bottom of the larger consolidation area, so I think it would take a significant amount of negativity to break down below that level, and quite frankly I don’t expect to see this market do that.
If we were to break down below the $2.66 level, then I think the market would come unraveled. At this point, I think that we continue to drift lower over the longer-term, until value hunters come back into the marketplace. In the short term, it should probably be no surprise at all if we bounce towards the $2.75 level in order to build up enough downward momentum to break through the support level and go much lower. I believe market participants will continue to look upon natural gas with negativity.
NATGAS Video 20.07.18
This article was originally posted on FX Empire
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