To learn more click here
Natural gas traded in a quiet session albeit a negative one on Wednesday. The market seems to be struggling with the $3 handle, just as we had anticipated. However, it must be said that we did see a nice surge lately so we figured the move down will find some support here and there.
The $2.80 level has offered support, and we do see the support running all the way down the $2.70. However, we think this is a minor area in the big scheme of things as the trend is so decidedly bearish of the last couple of years. Supply far outweighs demand, and this is going to change anytime soon which should continue to offer poor fundamentals for the natural gas markets.
If we can get a daily close below the $2.70 level, we are willing to sell this market aggressively as we think a move down to the $2.25 level is almost assured at that point. Certainly, there is no reason to be buying this market at this time until we can prove the bullish run by closing above the previous five. That is currently 35 sent above where we are now, which needless to say makes it unlikely in the short term.