NATGAS still stuck within tight trading range
Henry Hub Natural Gas (NATGAS) Technical Analysis Report for Jan 10, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NATGAS finished Thursday at 2.967 losing $0.023 (-0.77%). Trading $0.099 higher after the open, Natural Gas was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (NATGAS as at Jan 10, 2019):
Thursday's trading range has been $0.128 (4.28%), that's far below the last trading month's daily average range of $0.223. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NATGAS. Prices continued to consolidate within a tight trading range between 2.894 and 3.089 where it has been caught now for the whole last trading week.
Prices are trading close to the key technical support level at 2.878 (S1). The market found buyers again today around 2.961 for the third trading day in a row after having found demand at 2.939 in the previous session and at 2.948 two days ago. The last time this happened on Monday, NATGAS gained 1.52% on the following trading day.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could accelerate should prices move below the close-by swing low at 2.939 where further sell stops might get activated. 2018's low at 2.597 is within reach and we could see further downside momentum should the contract break out beyond.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior two Lows" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Natural Gas. Out of 131 times, NATGAS closed lower 56.49% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 67.18% with an average market move of -1.45%.
With six out of the other seven Commodity Markets closing lower today, the ones that stand out on the negative side are SUGAR losing -1.58% and CORN closing -1.28% lower. On the flipside the best performer has been CRUDE closing 0.3% higher. Read more