NATGAS closes above its opening price after recovering from early selling pressure
Henry Hub Natural Gas (NATGAS) Technical Analysis Report for Jul 03, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, NATGAS finished the week 13.05% higher at 1.750 after gaining $0.024 (1.39%) today on low volume. Trading up to $0.014 lower after the open, Nat Gas managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 1.738, the contract confirmed its breakout through the previous session high after trading up to $0.012 above it intraday.
Daily Candlestick Chart (NATGAS as at Jul 03, 2020):
Friday's trading range has been $0.036 (2.08%), that's far below the last trading month's daily average range of $0.082. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NATGAS.
Three candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns and one bearish pattern, the Bearish Hikkake Pattern.
Natural Gas managed to close above the 20-day moving average at 1.737 for the first time since May 6th. When this moving average was crossed above the last time on May 4th, NATGAS gained 4.18% on the following trading day. After having been unable to move above 1.738 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 1.750.
Though NATGAS is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the nearby swing high at 1.784 where further buy stops might get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Higher Closes" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Natural Gas. Out of 317 times, NATGAS closed lower 57.41% 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 60.25% with an average market move of -0.98%.
With three out of the other three Commodity Markets closing higher today, the ones that stand out on the positive side are SILVER gaining 0.27% and CRUDE closing 0.07% higher. None of the markets ended the day in the red. Read more