Natural gas tests the key levelNatrural gas was moving in a strong uptrend, and the good question whether this move will conitunue.
Inventory of natural gas is moving down along with the 5-year seasonal, as withdrawal period continues. That keeps natural gas in a seasonal uptrend, until expiration of a current futures contract, while the next will discount the upcoming injection period and will be pricing in a potential decline.
The price of natural gas has reached the overbought condition, having emerged out of the upper boundary of Bollinger Bands (50), which, statistically, increases the odds of the price reverting back the mean - the area of between $3.5 and $3.7. While it’s relatively difficult to time reversal trades, it can be a potentially sharp and furious move down.
If made correctly (with the help of some reversal formation, such as candlestick engulfing patter, for example), this situation might represent a decent opportunity with a low risk and potentially extended gain.
Remember, always remember to manage your risk and do your own research!