Natural gas markets rallied a bit during the week, showing signs of a recovery after a three-week breakdown. That being the case, it looks very likely to be an area where sellers could come back into the market to start shorting. The $2.50 level is massive in its implications, and it is a large, round, psychologically significant figure. However, I think that the market has resistance that extends to the $2.60 level. I think that there are plenty of reasons to think that this market continues lower, and if you take a look at it from a high altitude, you can see that we have a bit of a down trending channel going on.
NATGAS Video 17.06.19
If we were to break above the $2.60 level, then I think you need to “reset” and start looking for selling opportunities above there, specifically near the $2.75 level. This is a marketplace that will almost certainly continue to be negative until we hit the fall season, which is major demand season. Ultimately, if we show signs of exhaustion that I’m all over it. However, I think that we need to bounce a little bit further to take advantage of what has been in a reliable trend. To the downside, I think that we could be targeting $2.25, possibly even the $2.00 level after that. Quite frankly, there’s just far too much in the way of supply out there to make this market show any signs of bullishness between now and cold weather in the US/Europe.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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