NATGAS breaks above 200-day moving average for the first time since September 15th
Henry Hub Natural Gas (NATGAS) Technical Analysis Report for Oct 19, 2020 | by Techniquant Editorial Team
NATGAS finished Monday at 2.832 gaining $0.144 (5.36%). The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (NATGAS as at Oct 19, 2020):
Monday's trading range has been $0.252 (9.54%), that's far above the last trading month's daily average range of $0.189. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NATGAS. Prices continued to consolidate within a tight trading range between 2.610 and 2.890 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Regardless of a weak opening Natural Gas managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Nat Gas managed to close above the 200-day moving average at 2.823 for the first time since September 15th. When this moving average was crossed above the last time on September 15th, NATGAS actually lost -3.57% on the following trading day. After spiking up to 2.890 during the day, the contract found resistance at the 50-day moving average at 2.860. The market found buyers again today around 2.638 for the third trading day in a row after having found demand at 2.670 in the previous session and at 2.639 two days ago.
NATGAS shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying might speed up should prices move above the close-by swing high at 2.955 where further buy stops could get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior two Lows" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Natural Gas. Out of 123 times, NATGAS closed lower 55.28% 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 66.67% with an average market move of -0.82%.
With five out of the other seven Commodity Markets closing higher today, the ones that stand out on the positive side are SUGAR gaining 2.08% and SILVER closing 0.92% higher. On the flipside the worst performers have been CRUDE closing -0.24% lower and COFFEE losing -0.18%. Read more