Natural gas markets fell precipitously during the day on Monday again, breaking below the three dollars level and reaching towards the $2.88 level. The market looks as if it is extraordinarily bearish, and at this point I think the rallies will only offer selling opportunities as the oversupply of natural gas continues. I believe that it’s only a matter of time before reached down towards the $2.75 level, which has been massively supportive. I like selling rallies, I have no interest in trying to buy this market. Yes, recently we had broken above the $3.10 level, but that did not last very long. Because of this, I think that people will continue to be very concerned about buying this contract, and I also know that there is a massive amount of supply just above the three dollars level, as many of the fracking companies in the United States can make money at that level. In other words, every time we rally towards three dollars, sellers will return.
I think the three dollars level above is going to continue to act as a ceiling, and therefore as we rally above there, I think it’s to continue to offer shorting opportunities throughout the next several months. If we break down below the $2.75 level, the market will more than likely drop significantly towards the $2.50 level, although I don’t know if we can have that happen during the cold months in North America. This will continue to be a very volatile market, but I still prefer selling rallies as the longer-term trend dictates. Buying at this point is very difficult to do, as the market tends to move on a week by week basis but with the overall negative attitude towards pricing
NATGAS Video 03.10.17
This article was originally posted on FX Empire