Natural gas markets rose slightly during the week, as we have been oversold for some time. The $2.50 level underneath is massive support, as it has offered support several times in the past. Because of this, it looks as if the market is trying to form a little bit of a base, as this area has provided a little bit of demand. Beyond that, the winter has been a bit stubborn as far as leaving the United States, and therefore there is a possibility of a little bit of a bounce due to short-term demand.
NATGAS Video 25.02.19
However, the $3.00 level above features a massive gap that should attract a lot of selling pressure. If we can get some type of exhaustive candle in that region, it’s likely that the sellers will come back in and try to push this market back down. In fact, I think that’s the only play here: waiting for rallies to sell at signs of exhaustion. You certainly can’t sell at these lower levels, because we are overdone and that would essentially be “chasing the trade.”
The last thing you want to do is chase the trade, so look for opportunities to short this market from higher levels, as it gives you the ability to build up a bit of momentum. Momentum will be much easier to come by closer to the $3.00 level than it would and what has essentially been the basing price for so long. Patients will be needed. As far as buying this bounce is concerned, that would be a fool’s errand.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
More From FXEMPIRE:
- GBP/JPY Price Forecast – British pound continues to press resistance
- EUR/USD Mid-Session Technical Analysis for February 25, 2019
- AUD/USD Price Forecast – Aussie rallies to kick off week
- EUR/USD Price Forecast – Euro rallies to kick off week
- USD/CAD Zig-Zag Rejection Confirms Bearish Trend
- Gold Price Futures (GC) Technical Analysis – February 25, 2019 Forecast