The natural gas markets initially fell during the week, testing the $2.70 level for support. We turned around to form a huge hammer like candle, just as we did the previous week. This tells me that the market is ready to continue to try to bounce from here, perhaps continuing the overall consolidation that we have seen. The “inner consolidation” as the $2.70 level as support, while the $3.00 level is resistance. I think we may make a move towards the upside, as we continue to show this area to be somewhat reliable. Because of this, I suspect that longer-term traders are trying to buy this market and aim towards the $3.00 level or so to make the next move.

Natural gas markets of course are oversupplied in general, so I think that we won’t break out of this range, and I suspect that it is only a matter of time before the sellers will come back. However, we may get a couple of candles on the weekly chart that are positive. However, I would not try to hang onto this move beyond the $3.00 level, it would be quite shocked if we broke above the $3.10 level. Expect a lot of volatility, so at this point I would probably venture to say that it’s probably best to trade in small size, perhaps even the CFD market if you have that ability. Otherwise, options are a possibility as well, as this will be a very noisy market.

NATGAS Video 30.07.18

This article was originally posted on FX Empire

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