NATGAS breaks below Wednesday's low
Henry Hub Natural Gas (NATGAS) Technical Analysis Report for Jul 11, 2019 | by Techniquant Editorial Team
NATGAS finished Thursday at 2.408 losing $0.037 (-1.51%) on high volume. Trading $0.042 higher after the open, Nat Gas was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Wednesday's low at 2.416, the contract confirmed its breakout through the previous session low after trading up to $0.023 below it intraday.
Daily Candlestick Chart (NATGAS as at Jul 11, 2019):
Thursday's trading range has been $0.094 (3.84%), that's slightly above the last trading month's daily average range of $0.084. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NATGAS.
In spite of a strong opening Natural Gas closed below the prior day's open and close, forming a bearish Engulfing Candle.
After trading down to 2.393 earlier during the day, the market bounced off the key technical support level at 2.404 (S1). The failure to close below the support might increase that levels importance as support going forward. NATGAS closed back below the 50-day moving average at 2.440. After having been unable to move above 2.489 in the previous session, Nat Gas ran into sellers again around the same price level today, missing to move higher than 2.487. The last time this happened on July 4th, NATGAS actually gained 5.59% on the following trading day.
While the contract is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might speed up should prices move below the nearby swing low at 2.360 where further sell stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Its common bearish interpretation has been confirmed for Natural Gas. Out of 97 times, NATGAS closed lower 55.67% 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 63.92% with an average market move of -1.12%.
With four out of the other seven Commodity Markets closing higher today, the ones that stand out on the positive side are WHEAT gaining 3.17% and CORN closing 2.21% higher. On the flipside the worst performers have been GOLD closing -1.08% lower and SUGAR losing -0.91%. Read more