Natural gas markets drifted a little bit lower on Wednesday, but with Thursday offering the natural gas storage numbers, we could get a bit of a bounce. Clearly at this point in time, the bias is to the downside but we are at the bottom of the range that has been in play for quite some time, so if we get some type of shock to the upside we could see a reversal rather sharply. The $2.70 level above is your immediate resistance, and if we were to break above there we could even go back to the top of the overall consolidation area which at the $3.00 level.
NATGAS Video 18.04.19
So far, nothing has changed the attitude of the market overall, so as we are in this range it makes sense that we try to take advantage of any supportive action that we see, and therefore can keep our stop loss order relatively tight. This is because if we break down from here, it’s a significant negative turn of events and could have drastic consequences for the market. At this point, it’s obvious that there’s more of a risk to the upside then down, but that doesn’t mean we can’t fall.
Looking at this chart, you can see that this range has been important for quite some time, and therefore market memory could come into play if nothing else. Overall, I play the range until it breaks down. This is one of those times where although it might be a bit nerve-racking, the range tells you this is a demand zone.
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This article was originally posted on FX Empire
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