Natural gas markets have rallied a bit during the course of the trading session on Tuesday, as we continue to see upward pressure in general. The market has shown itself to be rather resilient and as a result I believe that we are going to continue to see a lot of noise in this general vicinity. If we can break above the $3.40 level, then it is possible we may have something bigger in store. Until then, I suspect that what we will see is a lot of noisy and volatile behavior.
NATGAS Video 23.06.21
Keep in mind that the markets have been positive overall, but they also have had a little bit of a “knock on effect” coming from the commodity boom in general. With that being said, we could see a complete turnaround rather quickly if the right conditions appear. A breakdown below the $3.15 level could be the beginning of a fairly significant selloff, but at the same time I can make an argument for this market going as high as $4.40. That is based upon the “measured move” of the consolidation area that we are attempting to break out of.
All things been equal, I would keep my position size somewhat small but keep in mind that this is a time of year that typically natural gas struggles a bit. Having said that, we do have some problems with tropical storms in the Gulf of Mexico, so that could provide a little bit of a short-term boost regardless. As I see it right now, the market is essentially trading between the $3.40 level above, and the $3.15 level underneath.
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