NATGAS finds buyers again around 1.832
Henry Hub Natural Gas (NATGAS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
NATGAS finished the week 4.13% higher at 1.893 after gaining $0.028 (1.5%) today on low volume. Trading up to $0.038 lower after the open, the contract managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (NATGAS as at May 22, 2020):
Friday's trading range has been $0.071 (3.8%), that's far below the last trading month's daily average range of $0.123. 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.
After moving lower in the prior session, Natural Gas managed to close higher but below the previous day's open, forming a bullish Harami Candle. The last time this candlestick pattern showed up on May 11th, NATGAS actually lost -7.34% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the Tweezer Bottom.
After trading down to 1.832 earlier during the day, the market bounced off the key technical support level at 1.858 (S1). The failure to close below the support might increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 1.947 (R1). After having been unable to move lower than 1.832 in the prior session, Nat Gas found buyers again around the same price level today at 1.832.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 1.777 where further sell stops might get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Tweezer Bottom" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Natural Gas. Out of 6 times, NATGAS closed lower 66.67% 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 83.33% with an average market move of -1.36%.
With five out of the other seven Commodity Markets closing lower today, the ones that stand out on the negative side are WHEAT losing -1.36% and COFFEE closing -1.1% lower. On the flipside the best performers have been SILVER closing 1.4% higher and GOLD gaining 0.46%. Read more