Natural gas markets have volatile session on WednesdayThe natural gas markets initially rallied during the day on Wednesday, but then turned around at the $2.83 level to show signs of resistance. However, the $2.80 level has offered support, so this looks as if it is a continuation of what we have seen.
Natural gas markets have initially rallied as Americans woke up to trade the commodity but found support near the $2.80 level underneath. That level continues to offer a lot of interest, and it makes sense that we would bounce a bit from there. I think that we are trying to catch our collective breath after making a fresh, new high, so I think that consolidation will probably make this market go back and forth. I think that ultimately the market will continue to test the $2.78 level underneath for the bottom of the support, and a break down below there would probably have the market looking towards the bottom of the uptrend channel, unleashing sellers to push towards the $2.73 level. Currently though, I believe that the buyers are to continue to look to jump into this marketplace, based upon the recent strength.
If we do rally from here, I think the $2.85 level will be resistance of course, but if we were to clear that area, we would break above the top of the uptrend channel, and we could continue to go much higher in some type of impulsive move. I believe that it is going to be very difficult, and that the choppiness will continue to be a mainstay in this market. I would keep my position size small, but we obviously have a handful of significant levels that we should be paying attention to. Longer-term, I think there is still a very strong case to be made for selling, but clearly that’s not what is going on right now.