Natural Gas markets slightly bullish during the weekNatural gas markets rallied a bit during the week, reaching towards the $2.75 level. The $2.60 level underneath is support, extending down to the $2.50 level. I believe that the market should continue to see buyers underneath, but if we were to break down below the $2.50 level, the market would collapse.
Natural gas traders rallied a bit during the week, bouncing from the $2.60 level. Reaching towards the $2.70 by the end of the week, that looks like a very bullish move initially, but I also see a couple of shooting stars that form at the $2.80 level. That means that the market has a significant barrier at that level, and I think that if we were to break above there, the market would go looking towards the $3 level. However, I think that longer-term we still have plenty of bearish pressure, so I’m looking to sell rallies at the first signs of exhaustion. The area is a bit tight, so you may need to look towards the daily candle to find that exhaustive signal, but I’m sure it will return.
The market is very difficult to hang onto to the upside, so I believe that being cautious and waiting for selling opportunities will continue to be the way to play this market. I believe that the continues to suffer from an oversupply issue, and ultimately a potentially significant downturn and demand as temperatures get warmer in the United States. I believe that the market is one that you need to be very patient with, but it does pay off quite nicely to the downside if you can wait for the right time. If we break down below the $2.50 level, I suspect that the next major support level is closer to the $2.25 level.