Natural gas markets have rallied significantly during the trading session on Wednesday, gaining over 1% by the time the Americans kicked off. The $2.78 level has offered a significant amount of support, but at the end of the day I think there is far too much in the way of resistance above, especially as we approach the $2.85 level. That’s an area where I would expect a lot of resistance, so therefore I’m waiting to see some type of exhaustive candle like a shooting star that I can start selling. I believe that we will probably go looking for a much more substantial support at lower levels, namely the $2.75 level, and then eventually the $2.70 level.
I have no interest in buying this market, I think that the recent grind lower will continue to pick up volume, and once it does we will more than likely test the bottom of the overall consolidation area, which could be as low as the $2.60 level over the next several weeks. Remember, this market tends to move based upon weather reports in the short term, so the volatility will only get worse, not better. I do like the idea of selling rallies repeatedly, but we need some type of exhaustive candle to confirm that it’s time otherwise you may find yourself sweating it out, waiting for the market to work in your favor which is no way to trade.
NATGAS Video 12.07.18
This article was originally posted on FX Empire
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