Natural Gas rallies on Tuesday, testing resistance
Natural gas markets went sideways initially during the trading session on Tuesday, but then reached towards the $2.78 level. I see a significant amount of resistance at the $2.80 level above, an area that has been resistive more than once. I think that if we can continue to see upward momentum, the market could then go as high as the $3.00 level, an area that is even more resistive. I think on the breakout, there could be a short-term buying opportunity, but I prefer to look for exhaustive and resistive candles to start shorting. I anticipate that this is essentially going to be a “2 speed” market if we do get a breakout, as there is so much in the way of noise and commotion in this market.
Your capital is at risk
Longer-term, you know that I believe that the oversupply is going to be a consistent problem in this market, and therefore I think that any rally should have you thinking that waiting for a nice cell signal could be the way to play. I think that with warmer temperatures coming in the next few weeks in America, it’s likely that we will continue to see bearish pressure above as well. Ultimately, this is a market that I think continues to offer plenty of selling opportunities, but I’m not blind to the fact that we could get a bit of a quick move to the upside and would be willing to play a small position above $2.80, but only if I could watch it. Otherwise, I’m looking to sell.