How to rely on techincal indicators in Natural Gas

click images to enlarge

We are talking about the natural gas today as it appears in the process of clearing another hurdle. After first catching our eye and introducing it to our Trade Focus in the September 10 edition we have seen an initial run up in price followed by a broad pattern of consolidation. The initial high since bottoming for the November contract was 5120 on October 6. This was slightly shy of a former peak at 5133 on August 3.

Today’s price action has it clearing this price level by reaching 5195 (as of 3:00pm central time). It would seem to us that a close above this 5133 level should set it up to test the next level of resistance which we show to be just above 5500.

Another aspect that got us stirred up over this market was that there was a reversal bar at the low on the daily chart and perhaps much more significantly, the month of September posted a large sweeping reversal off the low. All this in light of record supply. That’s impressive and deserved attention.

We would not be surprised at a move eventually into the 7000’s or near 8000 if and once the 5500 level is cleared.


God trading to all

Jeff and Diego

CB&S Division
MF Global Inc.

312 261-7380

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.