Natural gas markets have broken down during the week, slicing through the $2.30 level in punching the $2.25 level during the Friday session. The fact that we are closing so low on the range tells you that there is more than likely going to be a bit of follow-through, so it makes sense that the markets reach down to the lows again. The $2.00 level underneath there of course is important, but I think at this point it’s only a matter time before rallies offer selling opportunities. Perhaps it is difficult to sell this market from a longer-term charts, but it certainly can give us an idea as to where we should be trading. I think looking at short-term charts such as the daily chart or even the four hour chart gives you an idea as to when to start selling, but obviously for this chart you should be doing just that: selling.
NATGAS Video 22.07.19
The $2.50 level above for is going to continue to be massive resistance, and I think it’s going to be difficult for the market to break above there. Ultimately, we fade this market on rallies and have no interest in trying to pick up a market that is so oversupplied. To the downside, we could go as low as $2.00, but I do think that we are getting close to the bottom of the downtrend over the next several weeks. Once we start trading colder months contract, then we can start to buy but right now it’s far too early.
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This article was originally posted on FX Empire
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