By FXEmpire.com
The natural gas markets continue to rise during the Tuesday session as the breakout seems to be in full effect. If you read a report yesterday, you know that we considered the move above the Monday highs as a very bullish sign, and would begin to go along of the natural gas markets at that point in time.
We have done this, and although this is countertrend on the longer-term charts, we feel that there is a bit of an air pocket between here and the $3.57 level. Because of this, we feel that this is a “buy on the pullbacks” type of market now. Although we think ultimately this market falls, the fact that we afford a massive “W” at the lows tells us that the support seems to be fairly robust at this point in time.
During the session, we even managed to touch the $3.20 level which of course is a fairly significant milestone. We think that the market looks a little bit overextended in the short term, and a pullback is more than likely going to happen relatively soon. However, this should prove to be a simple buying opportunity as we go forward. Don’t get us wrong, we are looking to buy-and-hold for months and months on end, as we don’t think the trend is changed overall but rather would wish to take advantage of the next couple of weeks.
Once we get to the $3.50 mark, the next significant amount of resistance will be found at the four dollar level, and we would be comfortable holding in till we get to that point in time. It seems very counterintuitive to think that we would be buying natural gas after all of this bearishness, but one has to think about how oversold this market truly was. Many times, the strongest trends like this would have the wickedest bounces. We feel that that’s what this is ending up to be -space a massive and wicked bounce. However, we should take advantage of it as the rest of the market will help propel our positions higher and higher.
Click here a current Natural Gas Chart.
Originally posted here
