Natural gas markets have initially shot straight up in the air during the trading session on Monday, but as you can see ran into a lot of selling pressure just below the $4.20 level. With that being the case, it looks as if the natural gas market is a bit exhausted, as we have fallen all the way back down towards the $4.00 level. With this being the case, it is likely that we will continue to see a little bit of choppy behavior, but at this point time we are still very much in an uptrend.
NATGAS Video 27.07.21
It is worth noting that the $3.80 level is an area where we had broken out of previously, which was the top of consolidation, which is a bit of a bullish flag. That bullish flag measures to reach the $4.40 level, and it may take a while to get there but it certainly looks as if we are going to try. Beyond that, the previous consolidation between the $2.40 level and the $3.40 area measures for a $1.00 move, meaning the $4.40 area.
As long as there are still heat wave issues out in the western part of the United States, it does make quite a bit of sense that we will see further upward pressure on pullbacks, as there is no real sign the market changing anytime soon, with perhaps the lone exception of the fact that we ended up forming a bit of a shooting star. That being said, I still see plenty of buyers underneath, so I am not willing to get aggressive to the downside. If we can break above the top of the shooting star, that would obviously be a very bullish sign.
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