NATGAS finds buyers again around 2.140
Henry Hub Natural Gas (NATGAS) Technical Analysis Report for Aug 07, 2020 | by Techniquant Editorial Team
NATGAS finished the week 24.17% higher at 2.255 after gaining $0.099 (4.59%) today. Today's close at 2.255 marks the highest recorded closing price since May 5th. The bulls were in full control today, moving the market higher throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (NATGAS as at Aug 07, 2020):
Friday's trading range has been $0.116 (5.39%), that's slightly above the last trading month's daily average range of $0.106. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for NATGAS. Prices continued to consolidate within a tight trading range between 2.136 and 2.284 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
After trading down to 2.140 earlier during the day, Nat Gas bounced off the key technical support level at 2.150 (S1). The failure to close below the support could increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 2.315 (R1). After having been unable to move lower than 2.136 in the prior session, the market found buyers again around the same price level today at 2.140.
Crossing above the upper Bollinger Band for the first time since Wednesday, prices have shown unusually strong upward momentum in the short-term. This might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 1.889 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on Monday, NATGAS gained 3.81% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 2.284 where further buy stops could get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Up Move" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Natural Gas. Out of 327 times, NATGAS closed lower 58.41% 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 58.41% with an average market move of -0.51%.
With seven out of the other seven Commodity Markets closing lower today, the ones that stand out on the negative side are SILVER losing -2.09% and COFFEE closing -2.05% lower. None of the markets managed to end the day in the green. Read more