The natural gas markets exploded to the upside during the trading session on Thursday, reaching well above the $2.70 level initially, and then exploding even higher than that to aim towards the $2.75 level as I record this. There is a slight area of resistance though, so I think that we need to break above here to go looking towards the $2.80 level, an area that has been massive resistance recently. As you know if you have been reading my articles here at FX Empire, I’m very bearish of natural gas longer-term. I look at these rallies as an opportunity to start shorting at higher levels, which is my longer-term plan.
I believe that the $2.80 level is massive resistance, so I think that any type of exhaustion there should be sold. However, I also recognize that we could break through there and go to the next major resistance barrier, the $3.00 level. That level should be very influential, so I think that given enough time it could be a setup waiting to happen. If you are short-term trader, yes, you can start buying here I suppose, but I believe that the market is longer-term bearish, and I believe that the oversupply will continue to be a major issue. Ultimately, this is a market that should continue to be very jittery, as the market concerns itself with the weather patterns in the United States. I believe that the markets continue to show the impulsive moves, but I still wait for selling opportunities.