This week's focus turns to the March Natural Gas futures, where strong price action stemming from bullish fundamental data gives way to a possible buying continuation. Total Natural Gas storage stands at 1.686 bcf, or 27% below the 5-year average. This draw in supply has been aided by recent extreme cold temperatures across the United States.
After posting a recent swing low of 4.563 last week on Monday, February 10, 2014, the market has experienced a sharp climb in prices. Last week, we also saw the 20 day moving average act as support for the bullish market on multiple occasions, making this indicator a key support level in a swing trade opportunity.
As we start this week, we have seen yet another push up to the 5.400 level, indicating the Natural Gas market still holds a bullish sentiment. In the next few days, I would anticipate some profit-taking off of last week's sharp up-move. If the market sells off of last week's high levels, I would anticipate a buying opportunity at the 20 day moving average, once again using this indicator as support for the market. The target for this market would be yet another higher high, looking for the market to close above 5.500. Coupled with a strong Average Directional Index reading, this would signify further bullish sentiment.
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