Natural gas markets drifted a little bit lower during the trading session on Tuesday but is still well within the tolerances of the range that I have marked on the chart. We are below the $2.60 level, but you should keep in mind that support extends down to the $2.50 level, so it’s very likely the buyers will return given enough time. In fact, a break down below the $2.50 level would be quite alarming for those in the natural gas sector, because in that area it’s very difficult to be a profitable natural gas supplier. In that sense, we have a little bit of built-in support there.
NATGAS Video 17.04.19
That doesn’t mean that we jump in right away. What we wait for is some type of supportive candle such as a hammer, or a bounce that is significant and with volume, even if it’s on a short-term chart. At that point I’d be willing to buy natural gas for a short-term trade. I recognize that longer-term this is a bearish market, but I think for the next several months we should see this market bounce around below the $3.00 level, and above the $2.50 level. That is something that natural gas does every year and picks a nice range like this and simply sticks to it. If you are a good range bound trader, and perhaps more importantly a very patient trader, natural gas can be a great market to be involved in although it’s not exactly exciting, so for those of you who need a lot of volatility this may not be your market.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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