NATGAS breaks back below 50-day moving average
Henry Hub Natural Gas (NATGAS) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NATGAS finished the month 1.17% higher at 1.816 after edging lower $0.021 (-1.14%) today. Trading $0.027 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 below Thursday's low at 1.818, the contract confirmed its breakout through the previous session low after trading up to $0.037 below it intraday.
Daily Candlestick Chart (NATGAS as at Jul 31, 2020):
Friday's trading range has been $0.081 (4.41%), that's slightly below the last trading month's daily average range of $0.092. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NATGAS.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading as low as 1.781 during the day, Nat Gas found support at the 20-day moving average at 1.810. The market closed back below the 50-day moving average at 1.823. When this moving average was crossed below the last time on Monday, NATGAS actually gained 4.31% on the following trading day.
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.
Selling could accelerate should prices move below the nearby swing low at 1.767 where further sell stops might get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bearish for Natural Gas. Out of 759 times, NATGAS closed lower 50.99% 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 59.95% with an average market move of -0.86%.
With six out of the other seven Commodity Markets closing higher today, the ones that stand out on the positive side are SUGAR gaining 4.38% and SILVER closing 4.28% higher. On the flipside the worst performer has been CORN closing -0.23% lower. Read more