Natural gas markets continue to consolidate around the $4.00 level, as we have pulled back from there, but you can see that the market has been in a little bit of a consolidation range between $3.80 and $4.20. At this point, the $4.00 level is essentially the “fair value” of the market right now. I would also point out that just below at the $3.80 level it is the top of the bullish flag, which measures for a move to the $4.40 level.
NATGAS Video 02.08.21
You should also take a look at the massive consolidation area that we broke out of previously with the $2.40 level underneath has offered massive support, and the $3.40 level has been massive resistance. That measures for a $1.00 move from the breakout price of $3.40, so it all kind of comes together at the same time. That being said, it should be noted that the natural gas markets have been seeing a bit of a boost due to the idea of more demand coming out due to the heatwave. As long as that he wave is still around, that is going to drive up pricing over the longer term.
All that being said, it is not a huge surprise to see a little bit of a pullback from the round figure, because after all a lot of technical traders and options barriers tend to gravitate towards these areas. Ultimately, this is a market that I think is going to offer a little bit of value underneath, thereby offering the opportunity of value hunters to get back into the marketplace.
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