Natural gas markets initially tried to show signs of bullish pressure on Tuesday, but rolled over again to test the $2.93 level underneath. I think if we
Natural gas markets initially tried to show signs of bullish pressure on Tuesday, but rolled over again to test the $2.93 level underneath. I think if we can break down below the $2.92 level, the natural gas market should continue to drift lower, perhaps reach towards the $2.85 level underneath. The reaction that we saw in the market Monday tells me most of what I need to know: that the area above the $3 level continues to offer massive resistance, and that the sellers are willing to come back in. Because of this, I believe it’s only a matter of time before we see sellers get involved in short-term rallies. I think that the $2.85 level might be supportive for the short-term, but longer-term I think it’s susceptible to selling pressure as it has been sold through several different times in the past. After all, there’s nothing special about this particular move, and it just solidifies the overall bearish pressure in the “ceiling” at $3 above.
I continue to sell short-term rallies, and I don’t have any interest in buying whatsoever. I think that if the market falls, and that it starts to rally a can, you need to be looking for signs of when it’s time to start getting short again. The market will probably go down to the $2.75 level given enough time, and of course my longer-term target of $2.50 level below will be targeted over the longer term as well.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.