Natural gas markets rally on Tuesday to test resistance again

Natural gas markets gained a little over 1.7% as the Americans came on board for trading on Tuesday, testing the $2.80 level for resistance. This is an area that has been resistance more than once, and of course has been important on longer-term charts, perhaps even on the weekly chart. I think that the $2.80 level could offer enough resistance to show the market the downside again, and I think that natural gas could be a nice selling opportunity just waiting to happen. After all, warmer temperatures are coming to the United States I think that it is only a matter of time before natural gas sellers step back in at this all-important area.

Natural gas breaking above the $2.82 level would of course be very strong sign, perhaps sending market participants looking for higher levels, going as high as $3. However, I suspect that the overabundance of natural gas will eventually show itself, and then eventually the longer-term money will short. I think that the market ultimately will go looking for the $2.60 level again, but I also anticipate that we will probably continue to see a lot of volatility, that is common in the natural gas markets, and there’s nothing that tells me this is going to change in the short term. The $2.75 level is the first sign of support, followed by the $2.70 level, and then the $2.65 level after that. Natural gas markets do tend to be very technically driven, so that’s one of the great things about trading them. However, the overall supply of natural gas is strong.

NATGAS Video 02.05.18