Natural gas markets have rallied a bit during the trading session on Wednesday, reaching towards the vital $2.30 level. This is an area that has been resistance in the past, so it’s not a huge surprise to see that we have struggled to break higher. I believe that there are plenty of sellers above $2.30, so I’m waiting for an opportunity to start shorting again. Keep in mind that the Thursday session is the Independence Day holiday in the United States, so electronic trading will be limited, so quite frankly we probably won’t see much of a reaction until Friday, and even then after the jobs number.
NATGAS Video 04.07.19
Another thing to note about Friday is that a lot of larger traders may not be in the marketplace, and as a natural gas markets are a bit thinner than many of the other major futures markets, that could make them rather erratic. However, we have a clear trend and there’s no need to fight what’s been the way of this market for some time. The 50 day EMA above at the $2.44 level offers resistance above the $2.40 level which in and of itself is resistive. I think that fading rallies continues to work, but you are probably going to be looking at shorter time frames such as the 15 minute chart. This is more or less a scalpers type of marketplace as we don’t have a lot of room to the downside, but clearly no reason to go higher. I think that the $2.00 level will probably be targeted eventually, but it’s going to take some time to get there.
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This article was originally posted on FX Empire