Natural Gas markets rally significantly on Wednesday

Natural gas markets continue to be very noisy, as we rallied after initially falling on Wednesday. The market has seen the $2.66 level as support and is now approaching the $2.75 level above. I believe that the market should continue to be sold off every time it rallies, and I think it’s only a matter of time before we get bearish pressure that we can take advantage of. I like selling exhaustive candles, especially near important level such as the $2.80 handle, an area that has been resistive in the past. I believe that the $2.50 level below is a major bottom and the market, which extends to the $2.60 level. I think that the $2.60 level is probably where taking profit makes the most sense on these exhaustive candles, because I believe it’s going to take a lot of work to get below it.

If we do break above the $2.80 level, I think there is plenty of resistance above there to start selling as well. Even though that would be an obvious breakout, I believe that the $3.00 level will be even more resistive, and therefore I would not only be short in that area, but I would be aggressively short. I would look towards the daily charts that show signs of exhaustion first, and then drove down to the hourly chart to take advantage of a better entry. At this point, I have no interest in trying to buy this market, because natural gas continues to fail every time it shows signs of strength.

NATGAS Video 05.04.18