Natural Gas Forecast October 2, 2012, Technical Analysis

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The natural gas markets had an extremely bullish session on Monday as we smash through the $3.40 resistance level. This shows that we are truly breaking out in this market, and now we should consider buying pullbacks. Although we don’t necessarily agree with the idea of natural gas being a bullish market, the truth is that the market has decided which direction it wants to go and that’s all that truly matters in the end.

We do think that the market will eventually had to the $4.00 level, and as a result there will be plenty of opportunities to buy this market on pullbacks. In fact, that’s exactly what we’re doing via the futures and CFD markets. Also, if you have the ability to trade options you may choose to do that. Binary options are especially attractive as it takes a lot of the volatility out.

There is still a huge overhang of natural gas is far as supply is concerned in the, but obviously we are seeing a shift in momentum and therefore sentiment in this marketplace. While we don’t necessarily expect to see a massive move to the upside in short order and this rally cannot be argued with at this point. The truth is that we have gone up $.50 in very short order. This is a strong move in this marketplace, and does suggest that we are seeing real volume.

It should also be mentioned that the volume is starting to pick up in this market as well. This normally means that more and more players are stepping in to support the current prices. A breakout with volume at the same time is one of the favorite ways traders will use to look for bullish markets. Because of this, many of the hedge funds around the world have to be watching this particular market. Remember, this was one of their favorite markets previously as they all stepped in to sell during the massive bearish trend that we saw over the last couple of years. While we are not sure that the overall trend is over, it is most certainly at least taking a rest.

 

Natural Gas Forecast October 2, 2012, Technical Analysis

Natural Gas Forecast October 2, 2012, Technical Analysis

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About: FX Empire Analyst - Christopher Lewis

Christopher is a part of the FXEmpire.com analysis team. He writes Forex and Commodities technical analyses on daily and weekly basis. Christopher writes his analyses in a professional and yet simple to understand manner. His analyses are available in both text and videos.

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Bill Perryp

$2.70 in the rear view mirror…nice call

 

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