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Natural gas markets had a bullish week as the heat in the United States continued to drive demand for natural gas just a little bit higher. However, we still feel that the supply and demand equation in this market is simply to bearish for this rally to last much longer, and as such we feel that a shorting opportunity should present itself rather quickly.
The shooting star from the previous week was not broken to the upside, so it is still respected as resistance as far as we can tell. We have a level of $3.10 that suggests the market is broken out if they can get above, but it hasn't really come that close yet.
In order to trade the weekly charts, you're probably going to have to keep an eye on the daily market as well, as a daily close above the $3.10 level suggests that the market will move much higher. Until that happens, we are still very bearish of this market, and think that perhaps were starting to see a little bit of consolidation between the $3.10 level on the upside, and the $2.20 level on the bottom. Because of this, if you are a bit more aggressive you can short here, knowing that there is a definite exit point. If you're a bit more conservative, a daily close below the $2.70 level would be an acceptable sell signal as well.