NG - The Consolidation
For the last few weeks, NG has been consolidating as the other financial markets move all over the place.
The bearish head & shoulders pattern from June/August may not apply anymore due to the flattening. In previous natural gas declines (like late 2005-early 06) it would decline quickly and sharply after showing this sort of pattern. This does not look anything like that.
Even if it were to go down further, it needs to go up to some sort of support (I marked the ~$7.80 on my chart) so that it can regain the lost momentum. It seems to be bouncing off a longer-term trendline, which could be problematic.
That being said, it doesn't have to be very volatile and it could quickly reject.
I would recommend waiting for it to go to some sort of level and entering short there. My overall bias on this chart & natural gas in general is to the short side. Every time NG has been up to these levels for whatever reason, it goes back down again even if just to $4 or $5.
Any sort of breakdown below the trendline could also hold.
The winter is coming up, though, and you may have to adjust for a slight bullish bias if you plan to keep holding anything.
The bearish head & shoulders pattern from June/August may not apply anymore due to the flattening. In previous natural gas declines (like late 2005-early 06) it would decline quickly and sharply after showing this sort of pattern. This does not look anything like that.
Even if it were to go down further, it needs to go up to some sort of support (I marked the ~$7.80 on my chart) so that it can regain the lost momentum. It seems to be bouncing off a longer-term trendline, which could be problematic.
That being said, it doesn't have to be very volatile and it could quickly reject.
I would recommend waiting for it to go to some sort of level and entering short there. My overall bias on this chart & natural gas in general is to the short side. Every time NG has been up to these levels for whatever reason, it goes back down again even if just to $4 or $5.
Any sort of breakdown below the trendline could also hold.
The winter is coming up, though, and you may have to adjust for a slight bullish bias if you plan to keep holding anything.
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