The natural gas markets went back and forth during the trading session on Monday as traders came back to work. It seems as if we are starting to face a significant amount of support, which quite frankly makes sense considering we had sold off so drastically.
The natural gas markets went back and forth during the trading session on Monday, as we continue to meander just below the $3.00 level. This is a market that continues to be very bearish, but quite frankly we are so oversold that I think that a bounce is likely. That bounce will more than likely find trouble at the top of the gap, somewhere near the $3.30 level. I’m looking for an exhaustive candle stick in that general vicinity, and therefore will start shorting as soon as I get the opportunity. Beyond that, I think the $3.50 level above is massive resistance as well.
If we do break down below the lows of the last couple of sessions, we could go as low as $2.50, and while I think we will eventually find that level, I think we are a bit oversold at this point so waiting for a bounce is the best way to take advantage of what is such a negative market. There is more than enough supply out there to fulfill natural gas demand, and of course the winter temperatures in the United States have been warmer than anticipated, which of course hurts the value of natural gas as demand slips. I have no scenario in which a willing to buy natural gas at this point, because quite frankly the bullish season is already over. We may get the occasional bounce, but that will continue to offer selling opportunities.
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