Natural gas markets got a nice bounce in the marketplace during the Thursday session as traders started a short covering rally. The main driver was US supply shrinking more than expected during the announcement. However, the historical average is well above historical norms, and more gas is found on an almost daily basis at this point.
The market is a sell only one, and as a result we are selling rallies. We are certainly going to sell this one, but we are going to wait for one of two levels to trigger weakness if we can. The $2.80-ish level turned prices around earlier in the week, and we think it could again. Also, if we get beyond that mark, we are willing to sell at $3 on any signs of weakness. We will not buy this market.
Natural Gas Forecast February 3, 2012, Technical Analysis
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Natural Gas Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3