The natural gas markets fell during the session on Tuesday, but managed a bit of a bounce to form a hammer at the end of the session. The market looks set to continue consolidation, and the recently identified wedge pattern is still holding. The trend is down, so we certainly know that we want to sell this market, but the pattern still holds and keeps us flat.
The $3 level above should continue to be resistive going forward, so even on a break to the upside in this market we won't buy. The trend has been far too bearish over the last year to argue with it, and as a result we truly hope for a break of the bottom of the wedge to sell. If not, we will sell the rallies as they come on signs of weakness going forward. With the spring coming in the United States, natural gas is about to hit its weakest traditional pricing period.
Natural Gas Forecast February 22, 2012, Technical Analysis
Natural Gas Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3