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Natural gas markets initially went sideways on Monday, but then continue the major bearish pressure, as warmer temperatures are coming to the United States. This of course drives down the need for natural gas in one of the largest consumers in the world, as it looks like cold temperatures are finally going away. I like the idea of selling rallies going forward, which has been my trading strategy for a couple of years. There is nothing on this chart that tells me anything different is about to happen, and it makes sense to the $2.80 level offered resistance as it has been resistive again. We are now probably going to continue to go much lower, perhaps reaching down to the $2.65 level, the beginning of significant support down to $2.60.
Short-term rallies are to be sold, at the first signs of exhaustion. If we did break above the $2.80 level, although it would be a very bullish sign, but ultimately, I think that the $3.00 level above is the “ceiling” of the market, and I would be stunned if we manage to get above there. If we did break out to the upside a bit, I will simply sit back and wait for another exhaustive move to take advantage of.
If we did breakdown below the $2.60 level, we could unwind down to the to the $2.55 level next, and then the $2.50 level which is massive support on longer-term charts. I don’t think we break down below there, and I believe that the range bound trading should continue, and this should be an excellent trading circumstance for those of you who have the ability to trade short-term charts and are patient enough to take advantage of the signals.
NATGAS Video 01.05.18
This article was originally posted on FX Empire