TEHRAN (Iran News) – Natural gas markets initially shot higher during the course of the week but have given back quite a bit of the gain as it looks like traders are starting to focus on warmer temperatures down the road. In the short term, there is another storm coming to the northeastern part of the United States, but at the end of the day, we are trading the March contract which of course should feature spring and therefore warmer temperatures.
To the upside, I believe that the $3.00 level above for gas will continue to be very resistive, and therefore I would be very surprised to see the market break above there. If it did, that would obviously be a huge surprise, probably catching a lot of traders off guard. To the downside, I see the $2.00 level as being a longer-term target, but there are multiple areas where we could run into trouble along the way. It does not take a huge amount of imagination to suggest that this market could go lower due to the fact that warmer temperatures are coming, and of course, the fact that you could use a little bit of that same imagination to see a bit of a head and shoulders pattern.
Ultimately, I do not see any reason to be buying this market anytime soon, as we are far beyond the winter demand season based upon the futures contract. Rallies at this point in time should be thought of as selling opportunities, as we have seen during this candle.
- source : FXEMPIRE