Natural gas markets have rallied again during the trading session on Tuesday as we continue this massive parabolic run. That being said, it is difficult to chase a train like this, because quite frankly this has been over the top. Now that we are well above the $5.25 level, where we go next as far as the upside is concerned it is more or less a gas, with $5.50 being the most likely of candidates.
NATGAS Video 15.09.21
That being said, we have gone so parabolic that sooner or later we are going to get a nasty selloff that could be very dangerous for your account. Unless you are already long at this point, it is going to be difficult to get involved. If you are already long of this market, then you have to look at the area just below the $5.00 level as potential massive support. If we were to break down below the $4.85 level, then I think we probably have something more nefarious at hand. Nonetheless, buying on the dips is about the only thing you can do if you want to be involved. I certainly would not be a seller of this market, because we continue to see one reason after another for the market to go higher.
The most recent reason for natural gas prices going higher has been the tropical storm in the Gulf of Mexico which could shut down refining capacity temporarily in a market that is already struggling for some type of normalcy. The market will continue to see a lot of bullish pressure in the short term, but when this ends, it could be rather negative. At this point though, we are showing no signs of that.
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This article was originally posted on FX Empire