On Demand

NYMEX Nat Gas Poised For A Breakout $NG_F


NYMEX March natural gas futures have been contained within a $3.243 to $3.395 relatively tight balance bracket over the last six days. When a volatile market such as natural gas is contained to a relatively tight range for a period of time, a significant move usually follows when the market finally breaks from the balance bracket (see Market Profile graphic). It is possible that the market remain within balance for several more days, but it is best to be prepared for when the market does finally breakout. Additionally, there are two gaps, one on each end of the six day balance.



If the market trades above the $3.395 balance bracket, it may attempt to fill the $3.395 to $3.435 gap. Acceptance above that gap and the market may test the $3.495 reference.


If the market trades below the $3.243 six day balance low, it may attempt to fill the $3.224 to $3.243 gap. Acceptance below the gap and the downside references to watch are $3.144 and $3.105.

If the market trades outside the 6 day balance and FAILS, a rotation to the opposite end of the 6 day balance would be the most likely scenario.

Be patient in entering a trade as it is better to be a little late then a little early.

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Read more trading ideas in our daily Markets section.


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About the Author

Joseph Souhlakis began his career in commodities in early 2000 when he took a clerk job at the NYMEX for MBF Clearing Corp. Souhlakis acted as risk and position manager for some of the most successful traders in the crude oil and heating oil pits for more than three years. In 2003, with the backing of Mark Fisher and MBF Clearing Corp., Joe became a NYMEX member and began his trading career. Souhlakis remained as a house trader for MBF Clearing Corp. until January 2007 when he became an independent trader.In January 2008, Joe made the full-time switch from floor trader to electronic trading from home.
Learn more about Souhlakis on his website www.justjoecharts.com or follow him on Twitter @JustJoeCharts.

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